Rising rates took a toll on builder confidence in August. The National Association of Home Builders (NAHB) said the NAHB/Wells Fargo Housing Market Index (HMI) dropped 6 points as rates neared 7 percent. The HMI, a measure of home builder confidence in the market for newly constructed homes, had risen for seven straight months but is now at 50. Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo 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 major HMI indices posted declines in August. The HMI index gauging current sales conditions fell 5 points to 57, the component charting sales expectations over the next six months declined 4 points to 55, and the gauge measuring traffic of prospective dropped from 40 to 34. Deitz said that declining customer traffic is likely a result of the 7.7 percent rise in shelter inflation over the last year. It accounted for a striking 90 percent of the July Consumer Price Index reading of 3.2 percent. “The best way to bring housing inflation down and ease the housing affordability crisis is to enact policies at all levels of government that will allow builders to construct more homes to address a nationwide shortfall of approximately 1.5 million housing units,” he said.
Related Articles
UK Economy to Avoid Recession but Inflation Still a Worry, IMF Says
May 23, 2023
Mark Paul Cervantes
Economy, Inflation, International, Top News, U.S. Market
Comments Off on UK Economy to Avoid Recession but Inflation Still a Worry, IMF Says
LONDON (AP) — The British economy will avoid falling into recession this year, according to upgraded growth forecasts Tuesday from the International Monetary Fund. In its latest assessment of the U.K. economy, the Washington-based fund said domestic […]
Zimbabwe adopts new inflation rate based on U.S. dollar, local currency
March 3, 2023
Mark Paul Cervantes
Inflation, International, Top News
Comments Off on Zimbabwe adopts new inflation rate based on U.S. dollar, local currency
Zimbabwe will from now on measure inflation using a weighted average of items priced in Zimbabwean dollars and U.S. dollars, the government said on Friday. Previously the official rate was based only on items in […]
Expert: US economy strong amid bank failures, inflation
March 16, 2023
Mark Paul Cervantes
Economy, Inflation, Top News
Comments Off on Expert: US economy strong amid bank failures, inflation
(NewsNation) — The average American will most likely not be impacted by the crash of Silicon Valley Bank, says Cory Johnson, hedge fund manager and host of “The Drill Down” podcast. “I think that’s the important takeaway […]