US Builder Confidence for Newly Built Single-Family Homes Improves Slightly in July

On Thursday, 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 rose by one point to a reading of 33 in July. NAHB notes that sentiment has now remained in negative territory for 15 consecutive months.

The July HMI survey showed that 38% of builders reported cutting home prices—the highest share since NAHB began tracking the figure monthly in 2022. That compares with 37% in June, 34% in May, and 29% in April. The average price reduction held steady at 5% in July, unchanged since November. Sales incentives were used by 62% of builders in July, also unchanged from the previous month.

Among the index’s components, the gauge of current sales conditions rose one point to 36, while the measure of sales expectations over the next six months increased three points to 43. The component tracking traffic of prospective buyers fell by one point to 20, the lowest level since late 2022.

Looking at the three-month moving averages for regional HMI scores: the Northeast rose two points to 45; the Midwest held steady at 41; the South fell three points to 30; and the West declined three points to 25.