Economic uncertainty and persistent affordability challenges driven by rising material prices, high land costs, and elevated mortgage rates continue to weigh on builder sentiment.<\/p>\n
Builder confidence in the market for newly built single-family homes fell two points to 34 in July, down from an upwardly revised reading of 36 in June, according to the National Association of Home Builders (NAHB)\/Wells Fargo Housing Market Index (HMI) released today. Sentiment has remained below 40 for 15 consecutive months, the longest such stretch since 2012.<\/p>\n
\u201cMany potential buyers remain on the sidelines as they wait for lower mortgage rates, more certainty on inflation and a clearer economic outlook,\u201d said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. \u201cThe recently enacted 21st Century ROAD to Housing Act contains important provisions on land-use and zoning, regulatory reform and financing tools that address obstacles facing builders and buyers, but these reforms will take time to implement.\u201d<\/p>\n
\u201cWith the HMI below 40 for 15 straight months, affordability remains the home building industry\u2019s primary challenge, as elevated mortgage rates, costly land, rising material prices, and persistent skilled labor shortages continue to affect the market,\u201d said NAHB Chief Economist Robert Dietz. \u201cLooking ahead, the newly enacted housing law is a positive step that will help expand housing supply and lower overall housing costs, although more policy change is needed at the state and local level.\u201d<\/p>\n
The latest HMI survey also revealed that 37% of builders cut prices in July, up from 35% in June and 32% in May. The average price reduction was 6% in July, the same rate as the previous month. The use of sales incentives was 63% in July, up slightly from 62% in June, and marking the 16th consecutive month this share has reached 60% or higher.<\/p>\n
Derived from a monthly survey that NAHB has been conducting for more than 40 years, the NAHB\/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as \u201cgood,\u201d \u201cfair\u201d or \u201cpoor.\u201d The survey also asks builders to rate traffic of prospective buyers as \u201chigh to very high,\u201d \u201caverage\u201d or \u201clow to very low.\u201d Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.<\/p>\n
All of the HMI sub-indices posted declines in July. The HMI index gauging current sales conditions fell one point to 37, the index measuring future sales dropped two points to 43 and the index charting traffic of prospective buyers posted a two-point decline to 23.<\/p>\n
Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 45, the Midwest increased two points to 45, the South fell one point to 33 and the West dropped one point to 26.<\/p>\n
HMI tables can be found at nahb.org\/hmi<\/a>. More information on housing statistics is also available at Housing Economics PLUS<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Economic uncertainty and persistent affordability challenges driven by rising material prices, high land costs, and elevated mortgage rates…\n","protected":false},"author":2,"featured_media":767243,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-767242","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/767242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=767242"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/767242\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/767243"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=767242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=767242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=767242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}