According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), builder confidence in the market for newly built single-family homes fell two points to 34 in July, down from an upwardly revised reading of 36 in June. Economic uncertainty and persistent affordability challenges driven by rising material prices, high land costs and elevated mortgage rates continue to weigh on the market.
However, the newly enacted 21st Century ROAD to Housing Act is a positive step that will help expand housing supply and lower overall housing costs. While more policy changes are needed at the state and local levels, the recently passed legislation is expected to boost builder confidence.
The latest HMI survey also revealed that 37% of builders cut prices in July, up from 35% in June and 32% in May.
