DROP­PING HOME PRICES AF­FECT­ING BUILDERS’ BUSI­NESS

The Denver Post - - BUSINESS -

Home­builders took a beat­ing Thurs­day as ris­ing in­ter­est rates and home prices dis­cour­age po­ten­tial buy­ers.

Builder D.R. Horton said home de­liv­er­ies in the first quar­ter will come in be­low what Wall Street was ex­pect­ing. It cited home prices and mort­gage rates.

The Texas home­builder led all other ma­jor play­ers down­ward, fall­ing more than 5 per­cent in mid­day trad­ing. Oth­ers fell around 2 per­cent to 4 per­cent.

Although U.S. home price gains slowed for the fifth straight month in Au­gust, they have been run­ning ahead of wage gains for five years. Com­bined with the rapidly ris­ing cost of bor­row­ing money, many would-be buy­ers are be­ing pushed out of the mar­ket.

The Com­merce Depart­ment re­ported last month that sales of new U.S. homes plunged 5.5 per­cent in Septem­ber, the fourth con­sec­u­tive monthly drop. The an­nual rate of home sales has de­clined 15.3 per­cent since May.

Builders had as­sumed that a strong econ­omy would help fuel home sales, but newly con­structed homes are in­creas­ingly a tough sell. There is 7.1-month sup­ply of new homes on the mar­ket, the high­est level since March 2011.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.