The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) is reporting that builder sentiment in the market for newly built single-family homes declined 5-points to a reading of 75 in August. This is its lowest level since July of 2020, and after builder confidence topped at a reading of 90 last November. However, despite the decline, the reading at 75 is still signaling strong demand in a housing market lacking inventory.
In July, the three major indices were mixed. The HMI index gauging current sales conditions fell 5-points to a reading of 81, the component measuring traffic of prospective buyers declined 5-points to a reading of 65, while the gauge charting sales expectations in the next six months held steady at a reading of 81.
Looking at the three-month moving averages for regional HMI scores, the South posted a 3-point decline to a reading of held steady at 82. The West fell 2-points to 85, while the Midwest dropped 2-points lower to a reading of 68, and the Northeast posted a 1-point decline to a reading of 74.
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Builder Confidence at 13-Month Low on Higher Material Costs, Home Prices