Economic Snapshot: Builder confidence drops in June

This month’s housing market index is the lowest reading since November 2016.

Housing market index

Builder confidence slipped two points to a level of 64 in July, from a downwardly revised June reading on the National Association of Home Builders/Wells Fargo Housing Market Index.

“Our members are telling us they are growing increasingly concerned over rising material prices, particularly lumber,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is hurting housing affordability even as consumer interest in the new-home market remains strong.”

All three HMI components registered losses in July. The components gauging current sales conditions and charting sales expectations in the next six months both fell two points to 70 and 73, respectively. The component measuring buyer traffic slipped one point to 48.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 47. The West and Midwest each slipped one point to 75 and 66, respectively. The South dropped three points to 67.

Housing starts

Privately owned housing starts were at a seasonally adjusted annual rate of 1,215,000 in June. This is 8.3 percent above the revised May estimate of 1,122,000 and 2.1 percent above the June 2016 rate of 1,190,000.

Single-family housing starts were at a rate of 849,000 in June. This is 6.3 percent above the revised May figure of 799,000.

Privately owned housing completions were at a seasonally adjusted annual rate of 1,203,000 in June. This is 5.2 percent above the revised May estimate of 1,144,000 and 8.1 percent above the June 2016 rate of 1,113,000. Single-family housing completions were at a rate of 798,000 in June. This is 0.4 percent above the revised May rate of 795,000.