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Builder sentiment slips again in July as affordability hurdles persist

The NAHB/Wells Fargo HMI fell to 34, with all three components down and 37% of builders reporting price cuts, up from 35% in June.

Reported · Written up by our desk · Residential

Builder sentiment for new single-family homes weakened again in July, reflecting continued affordability pressure and economic uncertainty, according to Mortgage News Daily. The NAHB/Wells Fargo Housing Market Index fell two points to 34, extending a streak of 15 consecutive months below 40, the longest such stretch since 2012. All three major components moved lower, with current sales conditions down to 37, sales expectations for the next six months dropping to 43, and prospective buyer traffic falling to 23. Elevated mortgage rates, rising material costs, expensive land, and labor shortages continued to weigh on both builder confidence and buyer demand. NAHB Chairman Bill Owens said many potential buyers are waiting for lower mortgage rates, more certainty on inflation, and a clearer economic outlook. Mortgage News Daily also noted that 37% of builders reported cutting prices in July, up from 35% in June, while the average price reduction held at 6%. Sales incentives were used by 63% of builders for the 16th straight month, as builders leaned on promotions to attract demand.

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