U.S. Housing Market Index Unexpectedly Drops To Two-Year Low In August
(RTTNews) - A report released by the National Association of Home Builders on Monday unexpectedly showed a continued deterioration in U.S. homebuilder confidence in the month of August.
The report showed the NAHB/Wells Fargo Housing Market Index dropped to 49 in August from 55 in July. Economists had expected the index to come in unchanged.
With the unexpected decrease, the housing market index fell below the key break-even measure of 50 for the first time since May 2020.
"Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession," said NAHB Chief Economist Robert Dietz. "The total volume of single-family starts will post a decline in 2022, the first such decrease since 2011."
He added, "However, as signs grow that the rate of inflation is near peaking, long-term interest rates have stabilized, which will provide some stability for the demand-side of the market in the coming months."
The unexpected decrease by the headline index came as the current sales conditions index tumbled to 57 in August from 64 in July.
The traffic of prospective buyers index also slumped to 32 in August from 37 in July, while the sales expectations in the next six months index dipped to 47 from 49.
On Tuesday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of July.
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