WASHINGTON, Nov. 19 (Xinhua) -- U.S. homebuilder sentiment decreased in November as growing affordability concerns of consumers led to a decrease in homebuilder's confidence.
The latest housing market index (HMI) dropped 8 points to 60 in November, the lowest level since August 2016, the National Association of Home Builders (NAHB) said on Monday.
Other major HMI indices dropped as well. The sub-index which measures current sales conditions dropped 7 points to 67, while the indicator that shows expectations for transactions in the next six months also decreased 10 points to 65.
The sub-index gauging buyer traffic dropped 8 points to 45, also the lowest level since August 2016, said NAHB.
"Builders report that they continue to see signs of consumer demand for new homes but that customers are taking a pause due to concerns over rising interest rates and home prices," said Randy Noel, Chairman of NAHB.
"While home price growth accommodated increasing construction costs during this period, rising mortgage interest rates in recent months coupled with the cumulative run-up in pricing has caused housing demand to stall," said Robert Dietz, Chief Economist of NAHB.
U.S. mortgage rates reached the highest level since 2011 several weeks ago, according to the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac.
"Recent policy statements on economic conditions have lacked commentary on housing, even as housing affordability has hit a 10-year low," said Dietz.
About 56.4 percent of new and existing homes sold in the third quarter were affordable to U.S. families earning the median income of 71,900 U.S. dollars, the NAHB said in a separate report on Nov. 8.
The percentage was the lowest reading since mid-2008, NAHB said.
"Given that housing leads the economy, policymakers need to focus more on residential market conditions," said Dietz.
Dietz also noted that U.S. homebuilders have adopted a more cautious approach to market conditions as the U.S. Federal Reserve (Fed) policymakers back further interest rate hikes.
The Fed raised its benchmark interest rate for the third time this year in September. Fed policy makers also indicated another possible rate hike in December. Enditem