by Calculated Danger on 8/15/2024 10:00:00 AM
The Nationwide Affiliation of Residence Builders (NAHB) reported the housing market index (HMI) was at 39, down from 41 final month. Any quantity beneath 50 signifies that extra builders view gross sales situations as poor than good.
From the NAHB: Builder Confidence Strikes Decrease as Market Waits for Fee Cuts
An absence of affordability and purchaser hesitation stemming from elevated rates of interest and excessive dwelling costs contributed to a decline in builder sentiment in August.
Builder confidence available in the market for newly constructed single-family houses was 39 in August, down two factors from a downwardly revised studying of 41 in July, in accordance with the Nationwide Affiliation of Residence Builders (NAHB)/Wells Fargo Housing Market Index (HMI) launched as we speak. That is the bottom studying since December 2023.
“Challenging housing affordability conditions remain the top concern for prospective home buyers in the current reading of the HMI, as both present sales and traffic readings showed weakness,” mentioned NAHB Chairman Carl Harris, a customized dwelling builder from Wichita, Kan. “The only sustainable way to effectively tame high housing costs is to implement policies that allow builders to construct more attainable, affordable housing.”
Virtually three-quarters of the responses to the August HMI had been collected throughout the first week of the month when rates of interest averaged 6.73%, in accordance with Freddie Mac. Mortgage charges declined notably the next week to six.47%, the bottom studying since Might 2023.
“With current inflation data pointing to interest rate cuts from the Federal Reserve and mortgage rates down markedly in the second week of August, buyer interest and builder sentiment should improve in the months ahead,” mentioned NAHB Chief Economist Robert Dietz.
The August HMI survey additionally revealed that 33% of builders lower dwelling costs to bolster gross sales in August, above the July charge of 31% and the very best share in all of 2024. Nevertheless, the typical value discount in August held regular at 6% for the 14th straight month. In the meantime, the usage of gross sales incentives elevated to 64% in August from 61% in July, and this was the very best stage since April 2019.
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The HMI index charting present gross sales situations in August fell two factors to 44 and the gauge charting site visitors of potential patrons additionally declined by two factors to 25. The element measuring gross sales expectations within the subsequent six months elevated one level to 49.Wanting on the three-month shifting averages for regional HMI scores, the Northeast fell 4 factors to 52, the Midwest dropped 4 factors to 39, the South decreased two factors to 42 and the West held regular at 37.
emphasis added
Click on on graph for bigger picture.
This graph exhibits the NAHB index since Jan 1985.
This was beneath the consensus forecast.
