Builder Sentiment for Newly Built Single-Family Homes Declines for the 8th Consecutive Month in August

On Monday (8-15-22), the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reported that builder sentiment in the market for newly built single-family homes fell 6-points lower in August to a reading of 49. This marks the eighth consecutive monthly decline and the first time since May of 2020 that the HMI reading dropped below the break-even measure of 50.

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

All three HMI components posted declines in August, and each fell to their lowest level since May 2020. Current sales conditions dropped seven points to 57; sales expectations in the next six months declined two points to 47; and traffic of prospective buyers fell five points to 32.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell nine points to 56, the Midwest dropped three points to 49, the South fell seven points to 63, and the West posted an 11-point decline to 51.