U.S. Homebuilder Confidence Unexpectedly Deteriorates In July

(RTTNews) - A report released by the National Association of Home Builders on Thursday showed an unexpected deterioration in U.S. homebuilder confidence in the month of July.

The report said the NAHB/Wells Fargo Housing Market Index fell to 34 in July from an upwardly revised 36 in June. Economists had expected the index to come in unchanged compared to the 35 originally reported for the previous month.

"With the HMI below 40 for 15 straight months, affordability remains the home building industry's primary challenge, as elevated mortgage rates, costly land, rising material prices, and persistent skilled labor shortages continue to affect the market," said NAHB Chief Economist Robert Dietz.

He added, "Looking ahead, the newly enacted housing law is a positive step that will help expand housing supply and lower overall housing costs, although more policy change is needed at the state and local level."

The report said the index gauging current sales conditions edged down one point to 37, while the index measuring future sales dropped and the index charting traffic of prospective buyers both fell two points to 43 and 23, respectively.

The NAHB said the latest HMI survey also revealed that 37 percent of builders cut prices in July, up from 35 percent in June and 32 percent in May. The average price reduction was 6 percent in July, unchanged from the previous month.

The use of sales incentives was 63 percent in July, up slightly from 62 percent in June, and marking the 16th consecutive month this share has reached 60 percent or higher, the NAHB said.