If you are buying, selling, or renting a home, today’s builder survey says the U.S. market has stalled: Homebuilder confidence fell to 29, the lowest since June 2012, and 43% of builders cut prices this month. In Europe, France’s weekend riots raised what Paris pays to borrow, which feeds into French loan rates and leaves less money for fuel relief. At the pump, AAA’s diesel average is still above $6.30 a gallon.
Jump To Section
- Builders Are Cutting Prices and Still Cannot Find Buyers
- France Pays More to Borrow After the Riots
- The Price You Actually Pay
- Summary
- Outlook
- What You Should Do Now
- What Moved Since Yesterday
Builders Are Cutting Prices and Still Cannot Find Buyers
The National Association of Home Builders (NAHB) surveys U.S. homebuilders every month for its Housing Market Index. A reading above 50 means more builders see good conditions than poor ones. Builders see buyer interest before closings show up in official data, so this index is an early warning for home prices, construction jobs, and how much room you have to negotiate.
The October index, released this morning, fell three points to 29, the lowest since June 2012. Current sales conditions fell to 33, expected sales over the next six months to 32, and buyer traffic to 18, the weakest since April 2012 outside the first pandemic month. 43% of builders cut prices, the highest share since 2020, by an average of 6%, and 65% used sales incentives (NAHB).
Bill Owens (NAHB chairman and an Ohio builder) blamed mortgage rates “well above 7%,” higher gas prices, and inflation for thinning buyer traffic. He said builders also face higher costs for construction loans, materials, and diesel, and that more than one-third reported immigration enforcement in their markets, delaying jobs. Freddie Mac’s 30-year average stands at 7.40% until its next print on Thursday 22 October.
I see this as a buyer’s market without buyers. Prices are bending, but the monthly payment still blocks most households.
Status now: Builder sentiment is at a 14-year low, price cuts are spreading, and rates have not moved.
What it means for you: If you can finance a new home, you have more bargaining power than at any point this decade. If you are selling an existing home, you are competing with builders who are cutting prices and paying buyers’ costs.
France Pays More to Borrow After the Riots
When a government borrows, the interest rate investors demand on its 10-year bonds sets a floor under many loans in that country, including mortgages. The gap between French and German 10-year rates, called the spread, is the market’s price for French budget and political risk. A higher state borrowing bill also leaves less money for fuel-tax cuts and subsidies.
On Monday, the yield on France’s 10-year bond rose 9 basis points (hundredths of a percentage point) to 4.8712%, while Germany’s rose 2. The spread widened to about 145 basis points, a two-week high, though below the near-160 peak of early October. The French 10-year hit 4.99% in early October, its highest since 2002. France’s deficit exceeds 5% of national output, its 2027 budget is still under debate, and Moody’s updates the country’s credit rating on Friday 23 October. Italy’s 10-year rose 7.6 basis points, and the Paris stock index fell about 1.5% by midday (Reuters via Boursorama).
Status now: Markets are charging France more for the risk that street pressure blocks budget repair.
What it means for you: If you borrow, save, or hold funds in France or Italy, expect loan rates to stay high and fuel relief to be harder to extend.
The Price You Actually Pay
AAA’s national diesel average this morning is $6.3187, barely down from yesterday, up from $6.2665 a week ago, and nearly $2.70 above a year ago. Regular gasoline is $4.2953, down from $4.3556 a week ago (AAA). Brent crude, the global oil benchmark, slipped 1.3% to about $108 a barrel on Monday after Friday’s highest close since May (Reuters via Euronext). A one-day dip in crude does not lower your diesel bill, because diesel follows refined-fuel supply, and Gulf flows remain far below normal.
Status now: Diesel stays near its September record of $6.5276.
What it means for you: Budget for $6-plus diesel through the heating season.
Summary
Yesterday’s Economic lead was Europe’s dry Rhine and the end dates on fuel relief. Today’s stories show the same energy shock moving into borrowing costs. High fuel and material prices push builders’ costs up while high mortgage rates keep buyers away. In France, the cost-of-living anger that filled the streets is now raising the state’s borrowing bill. In both places, the rate you pay to borrow is becoming the price that decides your housing and budget options.
Outlook
(analysis, not certainty) Base case: Mortgage rates stay above 7% into the Federal Reserve’s 27 to 28 October meeting, builder price cuts widen, and the French spread stays elevated into Moody’s decision.
One market commentator argued that the energy drawdown is “nowhere near recovering” and that governments are draining emergency stocks faster than lost barrels are replaced. Open-source shipping data supports the direction: The Joint Maritime Information Center (JMIC) still counts only a trickle of Hormuz crossings, and Kpler’s Gulf flow estimate fell sharply last week. The stock claim gets its next official test in the U.S. Energy Information Administration (EIA) weekly report on Wednesday 21 October. I cannot predict Moody’s decision, the Fed’s move, or when Gulf flows recover. Watch the 10-year yields and the EIA stock figures, not market chatter.
What You Should Do Now
- Buying a new home: Negotiate hard. Ask in writing for a lower price, a rate buydown, or paid closing costs; nearly two in three builders already use incentives.
- Lock any mortgage quote below 7.40% for long enough to close.
- Selling: Price against nearby new builds, including their incentives, not against last year’s sale prices.
- Borrowing in France or Italy: Check whether and when your loan rate resets, and fix the rate if you can.
- Spread your savings across more than one bank and more than one government’s debt, so one country’s budget crisis cannot hit everything you hold.
- Budget diesel and heating oil at today’s elevated prices and ignore one-day crude dips.
What Moved Since Yesterday
- Rhine at Kaub (yesterday’s Economic lead): The gauge read 15 cm at 16:15 local time today, up from 8 cm yesterday but still far below the 25 cm low of the 2010s (PEGELONLINE).
Status for you: Barge deliveries stay crippled; book heating oil in barge-dependent regions now.
- Relief calendar: Macron says his government acted with fuel distributors to pass savings to the pump. I found no new extension of the 31 October or 31 December end dates since yesterday.
Status for you: Keep both dates in your calendar.
- Graham Act waiver and Russian diesel: Secretary of State Marco Rubio says the president will take up to 60 days to weigh the sanctions and tariffs he waived. Reuters reports the Russian diesel deal starts at about 2.3 million barrels this month, rising to about 7.6 million a month (Reuters via Euronext).
Status for you: Small volumes; no price relief yet.
- OCC debanking report: I found no new action from the Office of the Comptroller of the Currency (OCC) or the Consumer Financial Protection Bureau since the 14 October report (OCC).
Status for you: The complaint routes remain open.
