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Builder confidence edges up in August, NAHB index stays below 40
The NAHB/Wells Fargo Housing Market Index rose one point to 35 in August, while traffic of prospective buyers was unchanged at 23.
Builder sentiment improved slightly in August, but confidence in newly built single-family homes remained subdued, according to Mortgage News Daily. The NAHB/Wells Fargo Housing Market Index increased one point to 35, extending its run of being below 40 to a 16th consecutive month.
The report pointed to familiar headwinds, including affordability pressures, elevated construction costs, and weak demand for spec homes. It also flagged rising gas and diesel prices as an added contributor to higher material costs.
Within the survey, current sales conditions rose two points to 39, while sales expectations over the next six months held steady at 43 and prospective-buyer traffic stayed unchanged at 23. NAHB Chairman Bill Owens said builders still face high construction costs and broader economic uncertainty.
Builders continued to use pricing incentives, though at a lower pace, with 35% reporting price cuts in August, down from 37% in July. The average price reduction held at 6% and sales incentives were used by 63% of builders, while regional three-month moving averages were mixed.