The August NAHB home builder sentiment index is in contraction now at 49, with 50 the breakeven line. That is down from 55 in July and below the estimate of 54. The Present Situation fell to 57 from 64 while the Future Expectations component fell another 2 pts to 47. More expensive homes, up 40% over the past 2 years, and higher mortgage rates drove a 5 pt drop in Prospective Buyers Traffic which is now down to 32, 18 pts below the breakeven pace. Also, that buyers traffic number is at “the lowest level since April 2014 with the exception of the spring of 2020 when the pandemic first hit” said the NAHB chairman.
The NAHB chief economist said it pretty succinctly as a bottom line here, “Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession.” Remember, that housing all in is about 15-18% of the US economy historically.
Prospective Buyers Traffic