The National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released Thursday, reported that builder confidence in the market for newly-built single-family homes rose one point to 66 in August. Sentiment levels have remained in the 64-to-66 level for the past four months.
“Even as builders report a firm demand for single-family homes, they continue to struggle with rising construction costs stemming from excessive regulations, a chronic shortage of workers and a lack of buildable lots,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn.
“While 30-year mortgage rates have dropped from 4.1% down to 3.6% during the past four months, we have not seen an equivalent higher pace of building activity because the rate declines occurred due to economic uncertainty stemming largely from growing trade concerns,” said NAHB Chief Economist Robert Dietz. “Although affordability headwinds remain a challenge, demand is good and growing at lower price points and for smaller homes.”
The HMI index gauging current sales conditions increased two points to 73 and the component measuring traffic of prospective buyers rose two points to 50, the midpoint between confidence and lack thereof. The measure charting sales expectations in the next six months fell one point to 70.
Looking at the three-month moving averages for regional HMI scores, the South moved one point higher to 69, the West was also up one point to 73 and the Midwest inched up a single point to 57. The Northeast fell three points to 57.