Recent reports indicate that new home sales have fallen short of expectations, alongside negative revisions to previous months' data. Builders are experiencing shrinking profit margins, raising concerns that construction levels might regress to early COVID-19 recession standards if mortgage rates persist at elevated levels. Homebuilders' confidence is notably low, signaling industry challenges. While there was a brief period of optimism based on anticipated lower mortgage rates, current conditions suggest a tough market where even small increases in rates could hinder construction activity significantly.
Sales of new homes have disappointed expectations, with builders facing declining profit margins and an uncertain outlook due to elevated mortgage rates.
Current builders' confidence is alarmingly low, indicative of market struggles despite a temporary optimism observed late last year regarding mortgage rates.
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