On Tuesday, the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) was released, revealing that builder sentiment for newly-built single-family homes fell five points to 75 in August. This represents a 13-month low from July 2020.
The HMI is based on a monthly survey conducted by the National Association of Home Builders (NAHB) that measures builder perceptions on currently single-family home sales and gets their outlook for the next six months using the ranking of “good,” fair” or poor. If the HMI is above 50 it means that more builders “view conditions as good than poor.”
NAHB’s Rose Quint, attributes this low to higher construction costs and supply shortages leading to significant price growth. “The decline in the buyer traffic index to its lowest level since July 2020 is evidence that supply-side constraints have begun to hold consumers back,” said Quint in the NAHB blog.
To read the full blog, click here.