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Builder confidence in the market for newly-built single-family homes fell by two points to 64 this month, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
All the HMI indices were in decline: The index measuring current sales conditions fell one point to 71, the component gauging expectations in the next six months dropped two points to 70 and the metric charting buyer traffic dipped by one point to 48. Looking at the three-month moving averages for regional HMI scores, the Northeast posted a three-point gain to 60 and the Midwest was also up three points to 57 while the West was unchanged at 71 and the South lost a single point to 67.
“While demand for single-family homes remains sound, builders continue to report rising development and construction costs, with some additional concerns over trade issues,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn.
“Despite lower mortgage rates, home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers,” said NAHB Chief Economist Robert Dietz. “And while new home sales picked up in March and April, builders continue to grapple with excessive regulations, a shortage of lots and lack of skilled labor that are hurting affordability and depressing supply.”
