US Builder Confidence Drops for Third Consecutive Month in July

On Tuesday, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) showed builder sentiment in the market for newly built single-family homes fell 1 point from June to a reading of 42 in July. 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 July:

• The component charting current sales conditions declined 1 point to a reading of 47.
• The component measuring sales expectations in the next six months increased 1 point to a reading of 48.
• The component that gauges traffic of prospective buyers declined 1 point to a reading of 27.

The regional breakdown, shown as a three-month moving average, is as follows:

• The Northeast declined 6 points to a reading of 56.
• The Midwest declined 4 points to a reading of 43.
• The South posted a 2-point decline to a reading of 44.
• The West recorded a 4-point decline to a reading of 37.

The NAHB also reported that the July HMI survey also revealed that 31% of builders cut home prices to bolster sales in July, above the June rate of 29%. However, the average price reduction in July held steady at 6% for the 13th straight month. Meanwhile, the use of sales incentives held steady at 61% in July, the same reading as June.