Builder Confidence Takes a Hit as Mortgage Rates Soar to 23-Year Highs

With U.S. mortgage interest rates touching 23-year-old highs, annual building permit issuance and builder confidence dipped as summer drew to a close.

Builder confidence declined by 4% in October. The National Association of Home Builders/Wells Fargo score dropped to 40 (on a scale of 0 to 100, with 50 being “neutral”).

This was impacted by national year-to-year building permit issuance dropping by double digits for new single-family homes and multi-family complexes. The single-family permit issuance for 12 months through August dropped by 15.6%, and the multi-family count dropped by 13.6% for the same period.

Both categories dropped by double digits in Michigan and Minnesota. Wisconsin presented the only bright spot with multi-family permits growing 3.8% during that period. Single-family permits in Wisconsin dropped by 9.7%.