Rates are surging after the Fed ended a pandemic-era bond-buying program and said it would discuss at its May meeting a reduction of its balance sheet.
Mortgage rates have risen to a three-year high, making it tougher for borrowers to stretch to pay soaring prices for new houses.
With factories in several provinces in China shuttered by a growing number of Omicron infections, shortages of building materials in the U.S. could get worse.
Buyers are balking at the "double whammy" of rising mortgage rates and higher prices, said NAR's Lawrence Yun.
A “lack of resale inventory continues to support housing demand despite higher interest rates,” said Robert Dietz, NAHB's chief economist.
The Fed's tightening of monetary policy sent mortgage rates soaring to a three-year high this week, making it tougher for families to buy homes.
Homebuilders are facing several challenges, including construction costs rising 20% over the past 12 months, said Robert Dietz, NAHB’s chief economist.
The share of respondents who said mortgage rates will rise over the next year increased to a record high of 67%, according to a Fannie Mae report.
About a quarter of respondents cited the Russian invasion of Ukraine when asked about their economic outlook, the survey said.
The increase came as the Fed concluded a two-year program buying Treasuries and mortgage bonds to prevent a credit crunch during the pandemic.
