Homebuilders’ Hopes Are Rising For 2025 | Global News Avenue

High costs and mortgage rates may be holding back new home sales today, but homebuilders are increasingly predicting better times for the housing market in the coming months.

That’s according to the Builder Confidence Index released Tuesday by the National Association of Home Builders (NAHB). This suggests builders are more confident about the next six months, as the expectations index reached its highest level since April 2022.

NAHB executives say builders are looking forward to the coming second Trump era and expect a burst of business from his promised deregulation.

“While builders are concerned that high interest rates, rising construction costs and a lack of buildable lots will continue to be headwinds, they also expect post-election Regulation will be relaxed in the future.

Builders still face high mortgage rates

Sales and construction of new homes have been slow in recent years as high home prices and mortgage rates drive buyers out of the market.

The outlook for home loan rates has worsened in recent months amid stubborn inflation. This means the Fed Interest rates may remain higher It’s taking longer than planned a few months ago.

central bank’s federal funds rateInterest rates, which affect various borrowing costs, have been rising for nearly two years to curb spending and reduce inflation. Although the Fed Reduce influential interest rates From a two-decade high this fall, it remains above pre-pandemic levels. Economists expect the Fed to cut interest rates less aggressively in the new year.

As a result, mortgage rates are likely to remain above 6% in the coming year, NAHB Chief Economist Robert Dietz said in a prepared statement. The average interest rate on a 30-year fixed mortgage last week was 6.6%, according to Freddie Mac, well above the 2%-3% range during the pandemic or the typical 4%-5% range before 2020.