Builders were less confident in the market for newly-built single-family homes in September than they were in August as their fears over the impact of Hurricanes Harvey and Irma grew, according to the housing market index (HMI) released by the National Association of Home Builders (NAHB) and Wells Fargo.
The index revealed builder confidence was at a level of 64 in September, a three-point decrease from the downwardly revised reading of 67 in August.
“The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,” said NAHB Chairman Granger MacDonald. “Once the rebuilding process is underway, I expect builder confidence will return to the high levels we saw this spring.”
“Despite this month’s drop, builder confidence is still on very firm ground,” said NAHB Chief Economist Robert Dietz. “With ongoing job creation, economic growth, and rising consumer confidence, we should see the housing market continue to recover at a gradual, steady pace throughout the rest of the year.”
While the three components of the HMI decreased during the month, they remain at healthy levels. The current sales conditions component decreased four points to 70, while the sales expectations index also declined four points to 74. There was a single-point drop in the buyer traffic component to 47.
On a regional basis, the three-month moving average for HMI scores rose three points to 77 in the West and one point in the Northeast to 49. There was a single-point decline in the South to 66, and the Midwest posted a drop of three points to 63.
The seasonally adjusted index is calculated based on a monthly survey that looks at builder perceptions on single-family homes sales, sales expectations for the next six months, and the traffic of prospective buyers. An index level above 50 shows more builders think conditions are good than poor.
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