Builders increase price cuts as NAHB index falls to 32

US homebuilder sentiment deteriorated further in September: the NAHB Housing Market Index fell 3 points to 32, matching the December 2022 low. The index has remained below 50 for 29 consecutive months and below 40 for 17 straight months, the longest streak since 2012.

Key components: current sales fell 4 points to 35. Future sales expectations dropped 4 points to 37, the lowest since early 2023.

Pricing and incentives: 38% of builders reduced prices in September, up from 35% in August. The average price cut stayed at 6% for the sixth consecutive month. Sales incentives rose to 66% of builders from 63% prior.

Drivers: elevated borrowing costs, higher material costs, rising gas and diesel prices, and persistent labor shortages.

Conclusion: the US housing market slowdown is deepening. Potential macro implications: tighter financial conditions and weaker construction activity point to slower growth, which can weigh on risk assets, including crypto.