US Builder Confidence for Newly Built Single-Family Homes Rises Slightly in August
Affordability Pressures Keep Builder Confidence Low
On Monday, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reported that builder sentiment for newly built single-family homes rose 1 point in August to 35, up from 34 in July. The HMI has remained below 40 for 16 consecutive months.
The HMI survey showed that 35% of builders reported cutting prices in August, down from 37% in July and unchanged from 35% in June. This marked the 16th consecutive month in which at least 30% of builders reported cutting prices to support demand. The average price reduction was 6% in August, unchanged from July. The use of sales incentives was 63%, also unchanged.
The HMI component measuring current sales conditions rose 2 points to 39, while the gauge of sales expectations over the next six months was unchanged at 43. The index tracking prospective buyer traffic was also unchanged at 23.
Regional three-month moving averages showed mixed results. The Northeast fell 1 point to 44; the South fell 2 points to 31; the West was unchanged at 27; and the Midwest was unchanged at 45.
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