US Builder Confidence Drops for Fourth Consecutive Month in August

On Thursday, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) showed that builder sentiment in the market for newly built single-family homes fell 2 points, from a downwardly revised reading of 41 in July to 39 in August. This is the lowest reading since December 2023 and remains below the breakeven point of 50.

Two out of three HMI component indices posted declines in August.

• The component charting current sales conditions declined 2 points to a reading of 44.
• The component measuring sales expectations in the next six months increased 1 point to a reading of 49.
• The component that gauges traffic of prospective buyers declined 2 points to a reading of 25.

On a three-month moving average basis, the regional HMI scores were as follows:

• The Northeast fell 4 points to a reading of 52.
• The Midwest dropped 4 points to a reading of 39.
• The South decreased 2 points to a reading of 42.
• The West held steady at 37.

The August HMI survey also revealed that 33% of builders cut home prices to bolster sales, above the July rate of 31% and the highest share this year, NAHB said. However, the average price reduction held steady at 6% for the 14th straight month. Meanwhile, the use of sales incentives increased from 61% in July to 64% in August—the highest level since April 2019.