Confidence among home builders remains below the key breakeven threshold of 50, per the National Association of Home Builders (NAHB), as their Housing Market Index dropped 1 point to 42 in July. This marked the third consecutive monthly decline and the lowest reading since December as higher rates continue to dampen sentiment. Scores over 50 on this index, which runs from 0 to 100, indicate that most builders feel confident about the current and near-term housing market outlook, whereas lower readings signify there’s less optimism among builders.
What’s the bottom line? Though all three index components (buyer traffic, current and future sales expectations) remained below 50, NAHB Chair, Carl Harris, noted that “the six-month sales expectation for builders moved higher, indicating that builders expect mortgage rates to edge lower later this year as inflation data are showing signs of easing.”
