WASHINGTON, Dec. 17 (Xinhua) -- U.S. builders are voicing concerns over high interest rates, rising construction costs, and a shortage of available lots, but they have shown increased optimism about higher sales expectations in the coming months, according to a survey released Tuesday.
Builder sentiment held steady to end the year as high home prices and mortgage rates offset renewed hope about a better regulatory business climate in 2025, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) said in its new survey.
Builder confidence in the market for newly built single-family homes was 46 in December, the same reading as last month, indicating that more builders consider housing market conditions to be poor than good.
"While builders are expressing concerns that high interest rates, elevated construction costs and a lack of buildable lots continue to act as headwinds, they are also anticipating future regulatory relief in the aftermath of the election," said NAHB Chairman Carl Harris, adding that future sales expectations have increased to a nearly three-year high.
The Federal Reserve will hold its final monetary policy meeting of the year on Dec. 17-18. The Chicago Mercantile Exchange (CME) Group's FedWatch Tool, which acts as a barometer for the market's expectation of the Fed funds target rate, shows that as of Tuesday afternoon, the market expects a 95 percent probability that the Fed will cut interest rates by 25 basis points at the next meeting.
Despite the Fed being on track to lower rates, NAHB Chief Economist Robert Dietz noted that concerns over inflation risks in 2025 will keep long-term interest rates, like mortgage rates, near current levels with mortgage rates remaining above 6 percent.
