Builder confidence remains steady despite costs

by Steve Randall18 Jul 2018

The confidence of America’s homebuilders in the market for newly-built single-family homes remains healthy.

The National Association of Home Builders / Wells Fargo Housing Market Index has remained at a reading of 68 in July with the component measuring sentiment in current market conditions steady at 74. The component gauging buyer traffic was up two points to 52.

“Consumer demand for single-family homes is holding strong this summer, buoyed by steady job growth, income gains and low unemployment in many parts of the country,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La.

However, with rising costs of materials, especially as tariffs add to the cost of imports, builders are concerned about the market outlook.

The component of the index gauging expectations in the next six months dropped two points to 73.

“Builders are encouraged by growing housing demand, but they continue to be burdened by rising construction material costs,” said NAHB Chief Economist Robert Dietz. “Builders need to manage these cost increases as they strive to provide competitively priced homes, especially as more first-time home buyers enter the housing market.”

The three-month moving average for the regional index readings was up one point to 57 for the Northeast; the Midwest remained unchanged at 65; the West and South each fell one point to 75 and 70, respectively.

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