With low existing inventory keeping demand for new homes solid, the National Association of Home Builders released a report on Tuesday showing an uptick in U.S. homebuilder confidence in the month of July.
The report said the NAHB/Wells Fargo Housing Market Index inched up to 56 in July from 55 in June. The slight increase matched economist estimates.
The housing market index increased for the seventh straight month, reaching its highest level since hitting 67 in June 2022.
“The lack of resale inventory means prospective home buyers who have not been priced out of the market continue to seek out new construction in greater numbers,” said NAHB Chairman Alicia Huey.
She added, “At the same time, builders are troubled over rising mortgage rates approaching 7% and continue to grapple with supply-side challenges, including ongoing scarcity of electrical transformer equipment and growing concerns about lot availability.”
The uptick by the housing market index came as the gauge measuring traffic of prospective buyers climbed to 40 in July from 37 in June, while the index gauging current sales conditions crept up to 62 from 61.
Meanwhile, the component charting sales expectations in the next six months fell to 60 in July from 62 in June, with the NAHB calling the decline a “reminder that housing affordability continues to be challenged by elevated interest rates.”
On Wednesday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of June.
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