After a significant jump in June and then a stall in July, confidence among the nation’s single-family homebuilders moved higher again in August, albeit at a slower pace.
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A monthly sentiment index from the National Association of Home Builders rose 1 point to 61, the highest level since November 2005. Any reading above 50 is considered positive. The index stood at 55 one year ago.
Of the index’s three components, buyer traffic increased 2 points to 45—the only component still in negative territory. Current sales conditions rose 1 point to 66, while sales expectations in the next six months held steady at 70.
Regionally, based on a three-month moving average, homebuilder confidence in the West and Midwest each rose 3 points to 63 and 58, respectively. The South gained 2 points to 63 and the Northeast held steady at 46. The Northeast has the smallest share of home construction nationally.
Single-family housing starts fell in July from June but are still up nearly 15 percent from a year ago, according to the U.S. Census. They are still well below historical norms, however, even as demand for housing rises.
Mortgage applications to purchase a new home also fell in July, amid rising interest rates. Rates have started to pull back again slightly, but prices for newly built homes are still at a significant premium to existing homes.