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Home-builder confidence sinks to lowest level in over a year as home prices soar
Economic Report
Home-builder confidence sinks to lowest level in over a year as home prices soar
Last Updated: Aug. 17, 2021 at 1:22 p.m. ET
First Published: Aug. 17, 2021 at 10:00 a.m. ET
By Jacob Passy
Builders fear that prospective home buyers are being scared away due to sticker shock
The numbers: With no clear end in sight to high home prices and supply-chain struggles, home-building firms are growing increasingly concerned about the state of the housing market.
The National Association of Home Builders’ monthly confidence index fell five points to a reading of 75 in August, the trade group said Tuesday. It represents the lowest level for the index in 13 months — at that time, the housing market was still reeling from the onset of the pandemic, and the home-buying craze of the past year was just beginning to take shape.
“Buyer traffic has fallen to its lowest reading since July 2020 as some prospective buyers are experiencing sticker shock due to higher construction costs,” said Chuck Fowke, a Tampa, Fla.-based custom home builder and chairman of the National Association of Home Builders. “Policymakers need to find long-term solutions to supply-chain issues.”
Index readings over 50 are a sign of improving confidence. Last year, the index quickly dropped below 50 in April and May as the pandemic began, but confidence rebounded as many Americans opted to resume their search for a new home last summer.
What happened: Two of the three gauges that underpin the overall builder confidence index also experienced five-point declines, including the index that measures current sales conditions and the component that tracks traffic of prospective buyers. The gauge that assesses sales expectations for the next six months remained unchanged from the previous month.
Regionally, every part of the country experienced a decline in confidence among home builders, led by a three-point drop in the South.
{snip}
Home-builder confidence sinks to lowest level in over a year as home prices soar
Last Updated: Aug. 17, 2021 at 1:22 p.m. ET
First Published: Aug. 17, 2021 at 10:00 a.m. ET
By Jacob Passy
Builders fear that prospective home buyers are being scared away due to sticker shock
The numbers: With no clear end in sight to high home prices and supply-chain struggles, home-building firms are growing increasingly concerned about the state of the housing market.
The National Association of Home Builders’ monthly confidence index fell five points to a reading of 75 in August, the trade group said Tuesday. It represents the lowest level for the index in 13 months — at that time, the housing market was still reeling from the onset of the pandemic, and the home-buying craze of the past year was just beginning to take shape.
“Buyer traffic has fallen to its lowest reading since July 2020 as some prospective buyers are experiencing sticker shock due to higher construction costs,” said Chuck Fowke, a Tampa, Fla.-based custom home builder and chairman of the National Association of Home Builders. “Policymakers need to find long-term solutions to supply-chain issues.”
Index readings over 50 are a sign of improving confidence. Last year, the index quickly dropped below 50 in April and May as the pandemic began, but confidence rebounded as many Americans opted to resume their search for a new home last summer.
What happened: Two of the three gauges that underpin the overall builder confidence index also experienced five-point declines, including the index that measures current sales conditions and the component that tracks traffic of prospective buyers. The gauge that assesses sales expectations for the next six months remained unchanged from the previous month.
Regionally, every part of the country experienced a decline in confidence among home builders, led by a three-point drop in the South.
{snip}
1 replies
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