Builder confidence in the newly-built single-family home market remained unchanged at a 67 reading in September, according to the latest the National Association of Home Builders (NAHB
)/Wells Fargo Housing Market Index (HMI).
The HMI index measuring current sales conditions inched up by a single point to 74 and the component gauging expectations in the next six months saw a two-point uptick to 74, while the metric charting buyer traffic was unchanged at 49. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 54 and the South remained unchanged at 70, but the West fell by a single point to 73 and the Midwest took a three-point spill to 59.
“A growing economy and rising incomes combined with increasing household formations should boost demand for new single-family homes moving forward,” said NAHB Chief Economist Robert Dietz. “However, housing affordability is becoming a challenge, as builders face overly burdensome regulations and rising material costs exacerbated by an escalating trade skirmish. Interest rates are also forecasted to keep rising.”
Separately, NAHB Chairman Randy Noel voiced the organization’s lack of confidence in President Trump’s new decision to place tariffs on an additional imports from China.
“President Trump's decision to impose 10 percent tariffs on $200 billion worth of Chinese imports, including $10 billion of goods used by the residential construction sector, could have major ramifications for the housing industry,” said Noel, a custom home builder from LaPlace, La. “With housing costs on the rise, this action translates into a tax increase on housing that will rise even more significantly on Jan. 1 when the tariff rate jumps to 25 percent. Further, this tax increase is coming on top of the current 20 percent tariffs on softwood lumber imports from Canada. The lumber tariffs have already added thousands of dollars to the price of a typical single-family home.
“With America facing a housing affordability crisis,” Noel added, “it is counterproductive to enact policies that will needlessly drive up the cost of housing. We respectfully urge the administration to change course and work to resolve these trade disputes in a manner that won't harm American businesses and consumers.”