Builder confidence is firm overall, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The August Index reading is 67, a one-point decline over the month prior. An above-50 reading indicates more builders have a positive outlook than a negative one.
“The good news is that builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations,” said Randy Noel, chairman of the NAHB, in a statement. “However, they are increasingly focused on growing affordability concerns, stemming from rising construction costs, shortages of skilled labor and a dearth of buildable lots.”
“The solid economic expansion and firm job market should spur demand for new single-family homes in the months ahead,” said Robert Dietz, chief economist at the NAHB. “Meanwhile, builders continue to monitor how tariffs and the growing threat of a trade war are affecting key building material prices, including lumber. These cost increases, coupled with rising interest rates, are putting upward pressure on home prices and contributing to growing affordability challenges, as indicated by the latest quarterly reading of the NAHB/Wells Fargo Housing Opportunity Index.”
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