U.S. home builders' sales expectations drop due to higher financing costs and mixed confidence.

This month, the sales expectations of U.S. home builders have declined due to rising mortgage rates, which have led to hesitation among buyers, affecting market sentiment. According to data from the National Association of Home Builders (NAHB) and Wells Fargo, the measure of future sales expectations over the next six months has dropped by 6 points to 60, marking the first decline since June.

Despite the decrease in sales expectations, the builder confidence index rose by 1 point in January, reaching 47, the highest level in 9 months. Builders are more optimistic about current sales and potential buyer traffic, further buoyed by the anticipated more favorable regulatory environment expected from the incoming Trump administration.

However, these mixed signals also show that builders remain uneasy. To attract buyers, builders have long used generous sales incentives to stimulate demand, including mortgage buy-downs to lower buyers' interest costs. Nonetheless, the Mortgage Bankers Association (MBA) data shows mortgage rates have surpassed 7%, the highest since early May, and continue to rise, which may further dampen real estate market activity.

Regarding current sales conditions, the index measuring current sales rose to 51, the highest since May, and the potential buyer traffic index increased to 33, the highest in 9 months. These figures indicate that despite the pressure from financing costs, some buyers are still actively participating in the market, although the overall market outlook remains uncertain.

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.