Builder Sentiment Remains Weak in July

Builder confidence in the market for newly built single-family homes declined in July, according to the latest NAHB/Wells Fargo Housing Market Index.

The index fell two points to 34, down from an upwardly revised June reading of 36. NAHB reports that builder sentiment has now remained below 40 for 15 consecutive months, the longest such stretch since 2012.

Affordability continues to be the industry’s primary challenge, with elevated mortgage rates, costly land, rising material prices, and skilled labor shortages affecting builders and buyers. NAHB also noted that 37% of builders reported cutting prices in July, while 63% reported using sales incentives.

The update also points to recently enacted federal housing legislation as a positive step toward addressing land-use, zoning, regulatory, and financing barriers, while noting that additional state and local policy work is still needed to expand housing supply and lower overall housing costs.

https://www.nahb.org/hmi