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When All You Have Are Builders, Everything Looks Like A Hammer
"Higher mortgage rates hammer confidence," read the headline from Wednesday's US builder sentiment update.
Golf claps and eye rolls. The NAHB made a joke. Did you catch it? They really want you to catch it. "Hammer." Hammers. People use hammers to build things. Like homes. Get it? Get it?!
The headline print on the sentiment gauge was 45. That's not good. May marks the first month below the 50 line that separates net optimism from pessimism since February.
Although mortgage rates retreated
Some of the apartment REITs talked in 1Q calls about their decisions to start, or to hold off on, projects in their pipeline. The key factor seemed to be construction costs (labor, materials); where those have dropped, they have started projects, where those remain too-high, they have continued to hold off. Of course, these REITs are issuing debt at around 5%, so they are not as rate-sensitive as the typical NAHB member.