Homebuilders are showing modest optimism as the housing market shows little improvement month over month, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today.
exist Inman Connect Las Vegas, July 30-August. On January 1, 2024, the noise and misinformation will be cut away, all your big questions will be answered, and new business opportunities will be revealed. join us.
Homebuilders are showing modest optimism as the housing market shows little improvement month over month, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today.
Builders’ confidence in the new single-family home market fell 1 percentage point in July to 42, the lowest score since December 2023, new data showed. Builder confidence exceeded 50 points in June and July last year.
“While buyers appear to be waiting for interest rates to fall, builders’ six-month sales forecasts rose, suggesting builders expect mortgage rates to edge slightly lower later this year as inflation The data shows signs of moderation.
“Although inflation remains above the Fed’s 2% target, it appears to be returning to a cooling trend. The NAHB expects the Fed to begin cutting interest rates by the end of the year, an action that will reduce costs for homebuyers, builders and developers. interest rates,” said NAHB chief economist Robert Dietz. “While housing inventory continues to increase, the total market inventory remains at a 4.4-month supply, indicating a long-term need for more home construction.”
Robert Dietz | National Association of Home Builders
Mortgage rates averaged just below 7% in June, according to Freddie Mac, which coupled with soaring construction and development loan rates, forced builder sentiment to weaken as buyers retreated from the market.
In NAHB’s July data survey, 31% of homebuilders reduced home costs in July, up from 29% reported in June. The average price decline in July remained stable at 6% for the 13th consecutive month. Sales incentives were also unchanged from the previous quarter at 61%.
The index is derived from a monthly survey of homebuilders, which asks them to rate perceptions of single-family home sales and expectations over a six-month period as “good,” “fair,” or “poor,” and rate homebuyer traffic. for “high to very high”.
In July, two of the categories saw single-point declines, while the third saw single-point growth. Current sales status dropped to 47, potential buyer traffic dropped to 27, and sales expectations rose to 48.
The three-month regional moving averages reflected in the HMI show the Northeast down 6 points to 56, the Midwest down 4 points to 43, the South down 2 points to 44, and the West down 4 points to 37.
