ConDig (18-July-22). US homebuilder confidence crashed in July as sales and buyer traffic eased in the wake of high inflation and rising interest rates, according to the latest Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
It comes as builder confidence in the market for newly built single-family homes booked its seventh straight monthly decline in July, crumbling 12 points to 55.
It was the lowest HMI reading since May 2020 and the largest single-month drop in the history of the HMI, except for the 42-point drop in April 2020, NAHB reported.
“Production bottlenecks, rising home building costs and high inflation are causing many builders to halt construction because the cost of land, construction and financing exceeds the market value of the home,” said NAHB chairman Jerry Konter, a
“In another sign of a softening market, 13% of builders in the HMI survey reported reducing home prices in the past month to bolster sales and/or limit cancellations.”
All three HMI components posted dipped in July, with current sales conditions falling 12 points to 64. Sales expectations in the next six months booked an 11 point drop to 50 and traffic of prospective buyers declined 11 points to 37.
The three-month moving averages for regional HMI scores, the Northeast fell six points to 65, the Midwest dropped four points to 52, the South fell eight points to 70 and the West posted a 12-point decline to 62.
“Affordability is the greatest challenge facing the housing market,” said NAHB chief economist Robert Dietz.
“Significant segments of the home buying population are priced out of the market. Policymakers must address supply-side issues to help builders produce more affordable housing.”
Homebuilder confidence nosedives in July
ConDig (18-July-22). US homebuilder confidence crashed in July as sales and buyer traffic eased in the wake of high inflation and rising interest rates, according to the latest Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
It comes as builder confidence in the market for newly built single-family homes booked its seventh straight monthly decline in July, crumbling 12 points to 55.
It was the lowest HMI reading since May 2020 and the largest single-month drop in the history of the HMI, except for the 42-point drop in April 2020, NAHB reported.
“Production bottlenecks, rising home building costs and high inflation are causing many builders to halt construction because the cost of land, construction and financing exceeds the market value of the home,” said NAHB chairman Jerry Konter, a
“In another sign of a softening market, 13% of builders in the HMI survey reported reducing home prices in the past month to bolster sales and/or limit cancellations.”
All three HMI components posted dipped in July, with current sales conditions falling 12 points to 64. Sales expectations in the next six months booked an 11 point drop to 50 and traffic of prospective buyers declined 11 points to 37.
The three-month moving averages for regional HMI scores, the Northeast fell six points to 65, the Midwest dropped four points to 52, the South fell eight points to 70 and the West posted a 12-point decline to 62.
“Affordability is the greatest challenge facing the housing market,” said NAHB chief economist Robert Dietz.
“Significant segments of the home buying population are priced out of the market. Policymakers must address supply-side issues to help builders produce more affordable housing.”