Builder confidence in the market for newly-built single-family homes remained solid and unchanged in July. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) came in at a reading of 68.
Builders are optimistic about the housing market given sustained strong demand for single-family homes. However, increases in construction costs are beginning to put pressure on price points.
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.”
The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
The HMI index measuring current sales conditions remained unchanged at 74 and the component gauging a 6-month outlook ticked down slightly 2 points to 73 and the metric charting buyer traffic rose 2 points to 52.
Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 57 while the Midwest remained unchanged at 65. The West and South each fell one point to 75 and 70, respectively.