The Dow Jones, S&P 500 and Nasdaq fell before the start of the Fed meeting

Homebuilder confidence was flat in December from the previous month and came in below analyst estimates amid uncertainty about how quickly mortgage rates will fall.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index remained at 46 in December, below economists’ estimates of 47, according to Bloomberg data.

Any reading below 50 indicates that more builders are seeing conditions as poor rather than good.

“While builders express concerns that high interest rates, rising construction costs and a shortage of buildable land remain headwinds, they also anticipate future regulatory loosening in the wake of the election,” NAHB Chairman Carl Harris, a custom homebuilder, said. “This is reflected in the fact that future sales expectations have increased to the highest level in almost three years,” the Wichita, Kansas, native said in a news release.

Mortgage rates have fallen for the past three weeks in a row, with the average 30-year mortgage rate at 6.6%. According to Freddie Mac.

There are growing expectations that the Federal Reserve will cut the federal funds rate by 25 basis points at the conclusion of its meeting on Wednesday. This decline has already been built into current mortgage interest rates, so housing experts do not expect mortgage rates to decline further.

“Concerns about inflation risks in 2025 will keep long-term interest rates, such as mortgage rates, near current levels with mortgage rates remaining above 6%,” wrote Robert Dietz, chief economist at NAHB.