Builder Confidence Moves Down One Point

August 16th, 2018 by Drew Vass, Executive Editor

As of August, builder confidence in the market for newly-built single-family homes moved down one point to 67 according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). However, despite the decrease, builders should not be too concerned.

NAHB Chairmen Randy Noel, also a custom home builder, states, “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. 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,” says 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, as indicated by the latest quarterly reading of the NAHB/Wells Fargo Housing Opportunity Index.”

The NAHB/Wells Fargo Housing Market Index comes from a monthly survey NAHB has been conducting for over 30 years.

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