The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) declined 6 points to 50 in August.
“Rising mortgage rates and high construction costs stemming from a dearth of construction workers, a lack of buildable lots and ongoing shortages of distribution transformers put a chill on builder sentiment in August,” said NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Alabama. “But while this latest confidence reading is a reminder that housing affordability is an ongoing challenge, demand for new construction continues to be supported by a lack of resale inventory, as many homeowners elect to stay put because they are locked in at a low mortgage rate.”
“Declining customer traffic is a reminder of the larger challenge that shelter inflation is up 7.7% from a year ago and accounted for a striking 90% of the July Consumer Price Index reading of 3.2%,” said NAHB Chief Economist Robert Dietz.
All three HMI components posted declines in August. The component measuring current sales conditions fell 5 points to 57, The component measuring sales expectations in the next six months fell four points to 55, and the component measuring buyer traffic dropped six points to 34.
Looking at the three-month moving averages for regional HMI scores, the Northeast rose four points to 56, the Midwest and South were both unchanged at 45 and 58, respectively, and the West decreased down a single point to 50.
Read the NAHB release.
