The National Association of Home Builders’ Housing Market Index is based on a monthly survey of builders. The index gauges builders’ confidence in the new home market using a scale where any number above 50 indicates more builders view current conditions as good than poor. In August, the index fell to 50, six points lower than the previous month. Alicia Huey, NAHB’s chairman, says builder sentiment declined but demand for new homes remains strong. “While this latest confidence reading is a reminder that housing affordability is an ongoing challenge, demand for new construction continues to be supported by a lack of resale inventory, as many homeowners elect to stay put because they are locked in at a low mortgage rate,” Huey said. The survey found a rising number of home builders countering higher costs by offering incentives to buyers. In fact, 25 percent of survey respondents reported reducing prices to bolster sales. (source)
