Builders’ confidence in the market for new single-family homes slipped as the National Association of Home Builders' housing market index fell to 64 in July from a downwardly revised 66 in June.

The June index was originally reported as 67.

IFR's poll of economists predicted the index would be 67.

“Our members are telling us they are growing increasingly concerned over rising material prices, particularly lumber,” NAHB Chairman Granger MacDonald said. “This is hurting housing affordability even as consumer interest in the new-home market remains strong.”

The HMI measure of current sales conditions has been at 70 or higher for eight straight months, indicating strong demand for new homes,” according to NAHB Chief Economist Robert Dietz. “This is hurting housing affordability even as consumer interest in the new-home market remains strong.”

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 70 from 72 the sales expectations index for the next six months decreased to 73 from 75; and the traffic of prospective buyers index dipped to 48 from 49.

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Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.