For the first time this year, US homebuilder sentiment declined.

After dropping every month in 2022, builder sentiment inflected to post seven straight gains amid robust demand for new construction. But a confluence of factors, including and especially the recent rise in mortgage rates, conspired to dampen the mood in August.

“Rising mortgage rates and high construction costs stemming from a dearth of construction workers, a lack of buildable lots and ongoing shortages of distribution transformers put a chill on builder sentiment,” NAHB Chairman Alicia Huey said Tuesday, editorializing around the largest drop in the sentiment gauge since October.

“While this latest confidence reading is a reminder that housing affordability is an ongoing challenge, demand for new construction continues to be supported by a lack of resale inventory, as many home owners elect to stay put because they are locked in at a low mortgage rate,” Huey added, in a familiar refrain.

Ostensibly, the decline in sentiment bodes poorly for housing starts, but as Huey noted, these are unique circumstances. With mortgage rates topping 7% again, more builders are offering concessions and sweeteners even as new construction remains the only option for many buyers given the lack of existing homes for sale. The share of builders dangling incentives rose for the first time in five months, the NAHB said.

Meanwhile, Home Depot reported results that topped estimates on Tuesday. Both sales and EPS beat, while comps fell just 2%, half the decline consensus expected. The company reiterated its full-year forecast and said that although there’s “continued pressure in certain big-ticket, discretionary categories,” items associated with “smaller projects” showed strength. People are still changing lightbulbs and buying a Snickers in the checkout aisle. I’m just joking.

Home Depot also said management remains “very positive” on the long-term outlook for home improvement, but I’m not sure that’s especially meaningful — like saying JPMorgan remains optimistic about the long run viability of banking.

Anyway, analysts were fine with the results. “This is a solid print/guide and investors shouldn’t fault them too much for leaving the full-year outlook unchanged despite the Q2 beat given all the uncertainty swirling around,” Vital Knowledge’s Adam Crisafulli wrote.

I’d be remiss not to mention that Warren Buffett recently bought some builders. Berkshire, which was a net seller of stocks in Q2, reported stakes in D.R. Horton, NVR and Lennar.

If Buffett wants to buy more, he certainly could. Berkshire’s cash pile rose to the second-highest on record last quarter.

“Declining customer traffic is a reminder of the larger challenge,” NAHB Chief Economist Robert Dietz remarked, in the color accompanying the builder sentiment release. That challenge: Shelter inflation.

“The best way to ease the housing affordability crisis is to enact policies at all levels of government that will allow builders to construct more homes,” Dietz added, on the way to reminding Washington that America’s housing shortfall is roughly 1.5 million units.