U.S. homebuilder confidence falls to 11-month low in July

U.S. homebuilder confidence in the market for single family homes fell in July to its lowest level since August 2020, driven by shortages in both supply and labor.

The NAHB/Wells Fargo Housing Market index declined to a reading of 80 this month from 81 in June. Economists poll had expected the index to advance marginally to a reading of at 82. A reading above 50 means more builders view market conditions as favorable than poor. The index hit an all-time high of 90 in November 2020.

“Builders are contending with shortages of building materials, buildable lots and skilled labor as well as a challenging regulatory environment,” said NAHB Chief Economist Robert Dietz. “This is putting upward pressure on home prices and sidelining many prospective home buyers even as demand remains strong in a low-inventory environment.”

Surging home prices and limited supply has put a lid on home sales recently, and fewer U.S. consumers believe that now is a good time to buy a home.

The NAHB survey’s measure of single-family home sales expectations in the next six months rose two points to a reading of 81 in July, while a gauge of current sales conditions decreased one point to 86.

The prospective buyers index fell six points to 65.

Housing starts in June are forecast to rise.