The National
Association of Homebuilders (NAHB) announced on Tuesday its housing market
index (HMI) rose one point to 65 in July.
Economists had forecast
the HMI to stay at 64.
A reading over
50 indicates more builders view conditions as good than poor.
All three HMI
components were higher this month. The indicator gauging current sales
conditions increased one point to 72, the measure charting sales expectations
in the next six months rose a single point to 71 and the component measuring
traffic of prospective buyers moved up one point to 48.
NAHB Chairman
Greg Ugalde said: “Builders report solid demand for single-family homes.
However, they continue to grapple with labor shortages, a dearth of buildable
lots and rising construction costs that are making it increasingly challenging
to build homes at affordable price points relative to buyer incomes”.
Meanwhile, NAHB
Chief Economist Robert Dietz noted: “Even as builders try to rein in costs,
home prices continue to outpace incomes. The current low mortgage interest rate
environment should be getting more buyers off the sidelines, but they remain
hesitant due to affordability concerns. Still, attractive rates should help
spur new home purchases in large metro suburban markets, where approximately
one-third of new construction takes place”.
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