Homebuilder sentiment is at a 14-year low

Kansas voters identified affordability as the paramount concern in a fiercely contested Senate race, according to reports highlighting the central theme of the upcoming midterm elections. The issue has dominated national discourse, with polling data indicating that a vast majority of Americans view rising costs as the most significant problem facing the country. This sentiment stands in sharp contrast to the position taken by President Donald Trump, who has repeatedly dismissed the term "affordability" as a political fabrication designed to undermine his administration. A Harris Poll conducted for The Guardian and published on October 15 revealed that 96 percent of Republicans believe the United States is experiencing an affordability crisis. The survey, fielded from September 24 to October 3 among 3,998 adults, found that 67 percent of respondents cited high grocery and gas prices as a top issue for the midterms. Despite this widespread concern, President Trump has characterized the concept as a "fake word made up by the Democrats." At the Republican National Convention in September, he argued that his opponents were responsible for the crisis and claimed that prices were rapidly decreasing under his leadership. More recently, speaking in Wasilla, Alaska, the president accused his rivals of using the topic dishonestly to attack him. White House officials maintain that the administration’s economic policies are yielding positive results. Spokesman Matthew Middleton stated that President Trump launched an aggressive, pro-growth economic agenda on day one, promising tangible benefits for Americans. He emphasized that the administration is working to halt inflation and drive job creation. Similarly, National Economic Council Director Kevin Hassett described recent economic data as containing "good news," attributing a slight uptick in the annualized inflation rate to temporary energy cost surges. Hassett noted that prices for specific food and drug categories remained flat or declined in September. However, economic indicators suggest a different reality for many households. The Bureau of Labor Statistics reported on October 14 that the annualized inflation rate rose to 3.7 percent in September, up from 3.4 percent in August. This figure exceeded consensus analyst forecasts. Public perception of the economy appears disconnected from official metrics, with nearly 61 percent of Americans believing the country is in a recession, despite the absence of two consecutive quarters of negative Gross Domestic Product growth. Economists attribute this disconnect to the immediate impact of visible costs like gas and groceries versus abstract measures such as GDP growth. The housing market has emerged as a particularly acute area of distress. Pending home sales plummeted 7.3 percent in September compared to August and dropped 11.3 percent from the previous year, according to the National Association of Realtors. This decline coincided with a sharp spike in mortgage rates, which climbed from approximately 6.8 percent at the start of September to 7.6 percent by the end of the month. Freddie Mac reported that the average 30-year mortgage rate reached 7.40 percent in the week ending October 8, the highest level since November 2023. These soaring borrowing costs have stalled the market. Existing home prices hit a median of $417,500 in September, a 1.3 percent increase year-over-year and the highest recorded September price. While completed existing-home sales edged up 1.5 percent in September, they remained 2.2 percent below levels from a year prior. Both August and September marked the slowest monthly sales rates of 2026. Inventory rose 1.9 percent to 1.60 million homes, the highest level since November 2019, suggesting that weak demand rather than a lack of listings is driving the slowdown. Homebuilder sentiment has deteriorated significantly, falling to its lowest level in 14 years. The National Association of Home Builders cited supply-side constraints, elevated construction costs, and weakened consumer confidence as key factors. Chairman Bill Owens noted that more than one-third of builders reported immigration enforcement activities in their markets during the past month, which delayed construction and discouraged legal workers from reporting for duty. The competition for labor and materials like copper and concrete has intensified as developers vie with data center builders for resources. Political figures are grappling with these realities. Representative Don Davis of North Carolina, speaking on CNN, acknowledged that affordability and survival are the dominant themes heard from constituents, including farmers and commercial fishermen. He warned that failing to address these costs would be a disservice to the families representatives serve. Meanwhile, critics argue that the current economic environment poses a severe challenge for the ruling party. Analysts note that the combination of high interest rates, restricted immigration affecting the workforce, and capital diverted toward artificial intelligence infrastructure creates a difficult landscape for both buyers and sellers. Voters in rural areas face particularly bleak conditions. Four out of ten rural Americans reported living in "survival mode," defined as a state where a single unexpected bill could cause financial ruin. This proportion exceeds that of urban and suburban residents. The disparity in economic outlook is further highlighted by shifting perceptions within the Republican base; only 28 percent of surveyed Republicans believed the economy was improving, a drop from 39 percent in February and 49 percent prior to the recent conflict involving Iran. As the November 3 elections approach, the gap between official economic narratives and the lived experience of high costs remains a central point of contention.