Builder confidence for newly built single-family homes fell two points to 64 in June, according to the latest data released Thursday by the National Association of Home Builders (NAHB) and Wells Fargo.
The Housing Market Index (HMI) is a weighted average of separate indices for three single-family data points. It asks respondents to rate the market conditions for the sale of new homes at present and in the next six months, as well as the traffic of prospective buyers of new homes. It falls in a range of 0-100.
Despite the slight dip, builder confidence has remained steadily in the mid-60’s for the past five months. However, increasing concerns over trade could spell trouble in the future.
“While demand for single-family homes remains sound, builders continue to report rising development and construction costs, with some additional concerns over trade issues,” NAHB Chairman Greg Ugalde said in a statement.
Every index tracked dropped in June. The index measuring current sales conditions fell to 71, the index measuring expectations over the next six months fell to 70 and the index measuring buyer traffic fell to 48.
“Despite lower mortgage rates, home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers,” NAHB Chief Economist Robert Dietz said in a statenent. “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.”
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