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Homebuilders Remain Confident, For Now

Builder confidence for new single-family homes fell slightly to 64 in June according to the latest data from the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

Builder confidence fell two points in June and has held in the low- to mid-60s over the past five months, the NAHB data indicated.

The indices gauging builder perception of sales in the next six months, as well as the traffic of prospective buyers, also declined in June.

While the index measuring current sales conditions fell one point to 71, the component gauging expectations in the next six months declined two points to 70. The survey charting buyer traffic decreased one point to 48, according to NAHB.

One of the reasons for the growing uncertainty among builders was concerns over the current trade issues, according to Greg Ugalde, Chairman, NAHB. “While demand for single-family homes remains sound, builders continue to report rising development and construction costs, with some additional concerns over trade issues,” Ugalde said.

Home prices remained another worrying factor for builders along with excessive regulation and labor shortage, issues that have been at the top of builders' minds since the beginning of 2019. “Despite lower mortgage rates, home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers,” said Robert Dietz, Chief Economist, NAHB. “And while new home sales picked up in March and April, builders continue to grapple with excessive regulations, a shortage of lots and lack of skilled labor that are hurting affordability and depressing supply.”

Breaking up the data by regional three-month averages, the HMI indicated that the South was the only region to indicate a fall in the indices with a single point drop to 67 in June. West remained unchanged at 71 points while the Northeast recorded a three-point gain to 60 during the month.

Click here to read the full report.

About Author: Radhika Ojha

Radhika Ojha is an independent writer and editor. A former Online Editor and currently a reporter for MReport, she is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.
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