The National Association of Home Builders/Wells Fargo Housing Market Index jumped to 72 in July, up 14 points from June. The index now stands at the pre-pandemic reading in March before the nationwide shutdowns.
NAHB Chairman Chuck Fowke noted builders are seeing strong traffic and interest in new construction as existing home inventory remains sparse. Chairman Mon also stated that buyer traffic is growing as a result of lower interest rates.
“While the housing market is clearly rebounding, challenges exist,” said NAHB Chief Economist Robert Dietz. “Lumber prices are at a two-year high and builders are reporting rising costs for other building materials while lot and skilled labor availability issues persist. Nonetheless, the important story of the changing geography of housing demand is benefiting new construction. New home demand is improving in lower density markets, including small metro areas, rural markets and large metro exurbs, as people seek out larger homes and anticipate more flexibility for telework in the years ahead. Flight to the suburbs is real.”
The HMI component measuring buyer traffic increased 15 points to 58. The component measuring current sales conditions increased 16 to 79, and the component measuring sales expectations in the next six months jumped 7 points to 75.
The three-month moving averages for regional HMI scores, the Northeast gained 22 points to 70, the Midwest increased 18 points to 68, and the West moved 14 points higher to 80. The South jumped 10 points to 73.
Read the NAHB release.