As a result of high inflation and increasing interest rates, builder confidence dropped by a large margin coinciding with a slow in sales and buyer traffic in the housing market. The National Association of Home Builders (NAHB) reported the July statistics from their NAHB/Wells Fargo Housing Market Index (HMI), and there has been a significant downtrend so far this month. According to the HMI, builder confidence when it comes to new, single-family homes has dropped by 12 points down to 55 in total. This marks the seventh month in a row that this number has decreased.

 

The HMI is now at the lowest point it has been since May of 2020 and July has had the largest single month loss since April 2020. NAHB Chief Economist Robert Dietz provided his input on the current challenges that the house building industry faces at the present time. "Affordability is the greatest challenge facing the housing market. Significant segments of the home buying population are priced out of the market. Policymakers must address supply-side issues to help builders produce more affordable housing." NAHB Chairman Jerry Konter also weighed in and expressed that the many challenges builders are facing right now, like inflation, have led to this reduction in builder confidence.

https://www.nahb.org/news-and-economics/press-releases/2022/07/builder-confidence-plunges-as-affordability-woes-mount