By Joshua Kirby
Confidence among U.S. house-builders receded in August after recent months' rises, with high mortgage rates beginning to weigh on demand, according to data from the National Association of Home Builders released Tuesday.
Here are the report's main takeaways:
--The NAHB's housing-market index, which gauges builder confidence in the market for single-family housing, fell six points to 50 in August from 56 in July. This reversed seven straight months of rises this year, and suggests mortgage rates of close to 7% are finally denting demand among prospective house-buyers.
--The reading came in well below the 57 expected by economists, according to a poll carried out by The Wall Street Journal.
--The August survey showed builders are increasingly turning to sales incentives to bolster flagging demand. The share of builders cutting prices rose to 25%, ending recent months' trend toward fewer builders cutting prices.
--Shrinking demand is a reminder of the challenge posed by shelter inflation, NAHB Chief Economist Robert Dietz said. "The best way to bring housing inflation down and ease the housing affordability crisis is to enact policies at all levels of government that will allow builders to construct more homes to address a nationwide shortfall of approximately 1.5 million housing units," Dietz said.
--The index gauging current sales conditions fell five points to 57 from 62 in July, while the component measures sales expectations in the next six months fell four points to 55. The index measuring traffic of prospective buyers dropped six points to 34.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
08-15-23 1014ET
