Aug. NAHB housing index dips, as affordability issues rise
Builders’ confidence in the market for new single-family homes slipped as the National Association of Home Builders' housing market index dipped to 67 in August from 68 in July.
IFR's poll of economists predicted the index would be 67.
“The good news is that builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations,” NAHB Chairman Randy Noel said. “However, they are increasingly focused on growing affordability concerns, stemming from rising construction costs, shortages of skilled labor and a dearth of buildable lots.”
“The solid economic expansion and firm job market should spur demand for new single-family homes in the months ahead,” according to NAHB Chief Economist Robert Dietz. “Meanwhile, builders continue to monitor how tariffs and the growing threat of a trade war are affecting key building material prices, including lumber. These cost increases, coupled with rising interest rates, are putting upward pressure on home prices and contributing to growing affordability challenges.”
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "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 sales conditions as good than poor.
The current single-family home sales index fell to 73 from 74, the sales expectations index for the next six months declined to 72 from 73; and the traffic of prospective buyers index slid to 49 from 51.