U.S. Homebuilder Sentiment Improved in July on Stronger Sales

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(Bloomberg) -- Sentiment among U.S. homebuilders crept higher in July after falling the previous month, indicating lower mortgage rates are helping shore up demand.

The National Association of Home Builders/Wells Fargo Housing Market Index rose one point to 65 this month, according to a report Tuesday. Economists in a Bloomberg survey projected the gauge would hold at 64.

Key Insights

  • Measures of present single-family sales and sales expectations increased in July, along with NAHB’s gauge of prospective buyer traffic.
  • Jerome Powell, chairman of the Federal Reserve, addressed housing market concerns during a Senate Banking Committee hearing last week where he cited higher material costs, a skilled-labor shortage and President Donald Trump’s immigration and tariff policies as holding back builders.

Official’s View

“Builders report solid demand for single-family homes,” said Greg Ugalde, NAHB Chairman and a builder and developer from Torrington, Connecticut. “However, they continue to grapple with labor shortages, a dearth of buildable lots and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes.”

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  • Builder sentiment in the West jumped in July to the highest level since June 2018.
  • Sentiment among builders in the South, the largest region in the U.S., also increased. It declined in the Midwest and Northeast.
  • The Washington-based trade association represents more than 140,000 members in areas ranging from building and remodeling to housing finance.

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