US Business Inventories Meet Expectations; Homebuilder Sentiment Remains Negative

July Business Inventories

• 📊 Business inventories for July increased by 0.2%, matching the previous month's final read and meeting expectations.
• 📈 This data point aligns with the economic outlook for the third quarter.

September Homebuilder Sentiment

• 🏠 The homebuilder sentiment index in September remained unchanged at 32 on the NAHB index, missing street expectations for a slight gain.
• ⚠️ A reading below 50 is considered negative, and the index has been in this low range since May.
• 📉 Builders are reporting softness in the market, with 39% cutting prices in September, the highest percentage in the post-COVID period.

Factors Influencing Housing Market

• 💡 Builders express optimism that lower mortgage rates could stimulate buyer interest.
• 💰 The average rate on a 30-year fixed mortgage has decreased significantly, reaching 6.25% recently.
• 🏦 NAHB expects the Fed to cut the federal funds rate this week, which could help lower interest rates for builder and developer loans.

Components of Homebuilder Sentiment

• ⚠️ Current sales conditions were unchanged at 34.
• 🚶 Buyer traffic dropped one point to 21.
• 🚀 Future sales expectations rose two points to 45, the highest reading since March.