Confidence among home builders remains below the key breakeven threshold of 50, per the National Association of Home Builders (NAHB), as their Housing Market Index dropped 2 points to 43 in June. Any score over 50 on this index, which runs from 0 to 100, signals that more builders view conditions as good than poor.
Among the three index components, current and future sales expectations both entered contraction territory. The gauge judging buyer traffic also declined, remaining in contraction.
What’s the bottom line? NAHB’s Chair, Caril Harris, explained, “Persistently high mortgage rates are keeping many prospective buyers on the sidelines. Home builders are also dealing with higher rates for construction and development loans, chronic labor shortages and a dearth of buildable lots.”