The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reported today (7-18-22) that builder sentiment in the market for newly built single-family homes tumbled 12 points lower in July to a reading of 55. This marks the seventh consecutive month of declines, and with the exception of April 2020 (the start of the pandemic when the HMI fell 42 points), is the lowest HMI reading since June 2020. It is also the largest single-month drop in the history of the HMI.
All three HMI components posted declines in July: Current sales conditions dropped 12 points to 64; sales expectations in the next six months declined 11 points to 50; and traffic of prospective buyers fell 11 points to 37.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell six points to 65, the Midwest dropped four points to 52, the South fell eight points to 70, and the West posted a 12-point decline to 62.
However, the NAHB does note that any reading above 50 indicates that more builders view conditions as good rather than poor and that demand remains strong.
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Builder Confidence Plunges as Affordability Woes Mount