*By Chloe Aiello* Home-builders were largely spared from the broader market sell-off early this week, but a mix of high home prices, rising mortgage rates, and low home-builder confidence is threatening the future of the housing market. [The National Association of Home Builders’ (NAHB) monthly confidence index plunged](https://www.nahb.org/en/research/housing-economics/housing-indexes/housing-market-index.aspx) eight points to 60 in November. Any score above 50 means more home builders than not have a positive view of market conditions, according to NAHB, but the sharp drop puts the score at its lowest level since August of 2016 and represents its steepest drop since 2014. The monthly confidence index surveys NAHB members to assess the health of the single-family home market. That plunge indicates consumers aren't expressing as much of an appetite to get into a new home, which could indicate a broader shift away from big-ticket purchases. It's hardly a surprise, considering mortgage rates and home prices are both on the rise. Home prices have soared in recent months, boosted by rising labor costs and tariff pressure on supplies, like lumber. Mortgage rates, pressured by rising interest rates are also pressuring potential home-buyers to reconsider hefty purchases. [A survey](https://www.mba.org/mba-newslinks/2018/november/mba-newslink-wednesday-11-14-18/applications-down-again-in-mba-weekly-survey?_zl=m67l4&_zs=RUKPN1) from the Mortgage Bankers Association (MBA) revealed mortgage application rates continued to fall for the week ending Nov. 9, after a disappointing October, in which mortgage applications for new homes [decreased 2.1 percent](https://www.mba.org/2018-press-releases/november/october-new-home-purchase-mortgage-applications-decrease-21-percent) from the year before. "Recent volatility in the financial markets and increasing rates continue to adversely impact mortgage application activity, even as the general economic outlook remains positive," MBA's Joel Kan said in a statement. "Both home purchase and mortgage refinance applications decreased over the week, driven largely by declines in conventional applications. Mortgage rates increased over the week for most loan types." Despite a confluence of negative forces for housing and for the stock markets more broadly, leading home-builders Lennar ($LEN) and KB Home ($KBH) were up in trading on Tuesday. Both are down more than 30 percent year-to-date.

Share:
More In Business
Small grocers and convenience stores feel an impact as customers go without SNAP benefits
Some small grocery stores and neighborhood convenience stores are eager for the U.S. government shutdown to end and for their customers to start receiving federal food aid again. Late last month, the Trump administration froze funding for the SNAP benefits that about 42 million Americans use to buy groceries. The U.S. Department of Agriculture says about 74% of the assistance was spent last year at superstores like Walmart and supermarkets like Kroger. Around 14% went to smaller stores that are more accessible to SNAP beneficiaries. A former director of the United Nations World Food Program says SNAP is not only a social safety net for families but a local economic engine that supports neighborhood businesses.
Load More