By Ovunc Kutlu
ANKARA (AA) - Homebuilder sentiment in the US fell for the sixth consecutive month in June, reaching its lowest level in two years, according to a survey released on Wednesday.
The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) fell to 67 this month, its lowest since June 2020, from 69 in May.
The last time the index recorded a monthly increase was in December when it stood at 84.
While a level above 50 is considered positive for the US housing sector, the index measures sentiment among homebuilders and considered an important indicator for housing investment and consumer spending on appliances and furnishings that have impact on overall economy.
Among the index's components, single family sales fell to 77 in June, from 78 the previous month, while traffic of prospective buyers declined to 48, from 53. The latter fell below the 50 level for the first time since June 2020.
"Rising inflation and higher mortgage rates are slowing traffic of prospective home buyers and putting a damper on builder sentiment," the National Association of Home Builders (NAHB) said in a statement.
NAHB Chairman Jerry Konter said six consecutive monthly declines for the HMI is "a clear sign of a slowing housing market in a high inflation, slow growth economic environment."
"The entry-level market has been particularly affected by declines for housing affordability and builders are adopting a more cautious stance as demand softens with higher mortgage rates," he added.
NAHB Chief Economist Robert Dietz said the housing market faces both demand- and supply-side challenges, adding that residential construction material costs are up 19% year-on-year.