The National
Association of Homebuilders (NAHB) announced on Thursday its housing market
index (HMI) fell to 39 in August from
a downwardly revised
July reading of 41 (from 42). This was the lowest reading since December 2023 (37).
Economists had forecast the HMI to increase to
43.
A reading over
50 indicates more builders view conditions as good than poor.
Two of three major
HMI components demonstrated declines in early August. The
component tracking current sales conditions and the component measuring traffic
of prospective buyers both fell by two points to 44 and 25 respectively.
Meanwhile, the component charting sales expectations in the next six months rose
one point to 49.
Commenting on
the latest report, NAHB Chairman Carl Harris noted challenging housing
affordability conditions remain the top concern for prospective home buyers in
the current reading of the HMI, as both present sales and traffic readings
showed weakness.
Meanwhile, NAHB
Chief Economist Robert Dietz suggested that with current inflation data
pointing to interest rate cuts from the Federal Reserve and mortgage rates down
markedly in the second week of August, buyer interest and builder sentiment
should improve in the months ahead.