By Ed Frankl


Confidence among U.S. home builders was held back again in July, hampered by high mortgage rates, according to a report from the National Association of Home Builders released Tuesday. Here are the report's main takeaways:

--The NAHB Housing Market Index, produced alongside Wells Fargo, edged down to 42 in July from 43 in June, a third fall in as many months, and the lowest reading since December. The index is a gauge of builder confidence in the market for single-family housing.

--Economists surveyed by The Wall Street Journal had expected the index to tick up to 44, still below the index's 50 break-even point between builders viewing conditions as "good" or "poor."

--Components of the index measuring current sales conditions and traffic of prospective buyers declined on month in July, while the measure of sales expectations in the next six months increased, the data said.

"While buyers appear to be waiting for lower interest rates, the six-month sales expectation for builders moved higher, indicating that builders expect mortgage rates to edge lower later this year," said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan.

--With inflation on a cooling trend, the Federal Reserve is expected to first cut interest-rate at the end of the year, which will lower rates for home buyers, builders and developers, NAHB Chief Economist Robert Dietz said.

--The survey said 31% of builders cut home prices to bolster sales in July, more than the 29% of June. The average price reduction in July held steady at 6% for a 13th straight month, while the use of sales incentives also was unchanged at 61%, NAHB said.

--On a regional three-month basis, all four regions showed a falling index, led by the Northeast, followed by the Midwest and West, and then the South.


Write to Ed Frankl at edward.frankl@wsj.com


(END) Dow Jones Newswires

07-16-24 1014ET