Builder confidence in the market for newly built single-family homes weakened slightly in June, down two points to 67 from a downwardly revised May reading of 69 on the NAHB/Wells Fargo Housing Market Index (HMI).
“Builder confidence levels have remained consistently sound this year, reflecting the ongoing gradual recovery of the housing market,” said NAHB Chairman Granger MacDonald.
“As the housing market strengthens and more buyers enter the market, builders continue to express their frustration over an ongoing shortage of skilled labor and buildable lots that is impeding stronger growth in the single-family sector,” said NAHB Chief Economist Robert Dietz.
Derived from a monthly survey that NAHB has been conducting for 30 years, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair or poor. The survey also asks builders to rate traffic of prospective buyers as high to very high, average or low to very low.
Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three HMI components posted losses in June but remain at healthy levels. The components gauging current sales conditions fell two points to 73 while sales expectations in the next six months dropped two points to 76. Meanwhile, the component measuring buyer traffic also moved down two points to 49.
Looking at the three-month moving averages for regional HMI scores, the Midwest and South each edged one point lower to 67 and 70, respectively. The Northeast and West both dropped two points to 46 and 76, respectively.