Builder Confidence Holds Steady

Builder confidence for newly built single-family homes remained unchanged at a “solid” 68 reading in July, the National Association of Home Builders reported yesterday.

The NAHB/Wells Fargo Housing Market Index measuring current sales conditions also remained unchanged at 74. The component gauging expectations in the next six months dropped two points to 73, while the metric charting buyer traffic rose two points to 52. (Any number over 50 indicates that more builders view conditions as good than poor).

Regional three-month moving averages showed the Northeast rose one point to 57 while the Midwest remained unchanged at 65. The West and South each fell one point to 75 and 70, respectively.

“Builders are optimistic about housing market conditions, basing their confidence on continued solid demand for single-family homes,” the report said. “However, persistent increases in construction costs make it increasingly challenging to produce homes at competitive price points, especially for the entry-level market where inventory is most needed.”

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., noted solid demand offset concerns of rising building costs.

“Today’s reading is consistent with likely solid gains in single-family starts later this summer,” Vitner said. “Although demand remains solid, builders continue to cite rising material costs amid recently-imposed tariffs as a key challenge in meeting rising demand.”