Builder Confidence Holds Firm in July

Window & Door
July 16, 2019
Markets

Builder confidence in the market for newly built single-family homes rose one point to 65 in July, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index. This marks the sixth consecutive month of sentiment levels holding at a steady range in the low- to mid-60s.

"Builders report solid demand for single-family homes. However, they continue to grapple with labor shortages, a dearth of buildable lots and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes," says Greg Ugalde, NAHB chairman.

"Even as builders try to rein in costs, home prices continue to outpace incomes," says Robert Dietz, NAHB chief economist. "The current low mortgage interest rate environment should be getting more buyers off the sidelines, but they remain hesitant due to affordability concerns. Still, attractive rates should help spur new home purchases in large metro suburban markets, where approximately one-third of new construction takes place."

All the HMI indices inched higher in July. The index measuring current sales conditions rose one point to 72, the component gauging expectations in the next six months moved a single point higher to 71 and the metric charting buyer traffic increased one point to 48.