All the HMI indices fell this month: The Index measuring current sales conditions dropped six points to 61, the component gauging expectations in the next six months tumbled by four points to 61 and the component charting buyer traffic edged dipped by two points to 43. Looking at the three-month moving averages for regional HMI scores, the Midwest dropped two points to 55 while the West and South both fell three points to 68 and 65, respectively, and the Northeast saw an eight-point drop to 50.
“The fact that builder confidence dropped significantly in areas of the country with high home prices shows how the growing housing affordability crisis is hurting the market,” said NAHB Chief Economist Robert Dietz. “This housing slowdown is an early indicator of economic softening, and it is important that builders manage supply-side costs to keep home prices competitive for buyers at different price points.”
However, NAHB Chairman Randy Noel, a custom home builder from LaPlace, La., was more optimistic.
“Recent declines in mortgage interest rates should help move the market forward in early 2019,” said Noel.