The National Association of Home Builders’ Housing Market Index is a monthly survey measuring builder confidence in the market for newly built homes. The survey asks builders for their perception of current sales conditions, expectations for the next six months, and home buyer traffic. Responses are scored on a scale where any number above 50 indicates more builders view conditions as good than poor. In June, the index fell two points to 43. Carl Harris, NAHB’s chairman, says interest rates are keeping conditions challenging. “Persistently high mortgage rates are keeping many prospective buyers on the sidelines,” Harris said. “Home builders are also dealing with higher rates for construction and development loans, chronic labor shortages, and a dearth of buildable lots.” But challenging conditions for builders may have benefits for buyers, as the survey also found an increasing number of builders cutting prices and offering incentives to entice home shoppers. In fact, twenty-nine percent of builders reported cutting prices, up from 25 percent the month before. The average reduction was 6 percent. (source)
