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U.S. Housing Market Index Drops To Lowest Level Since June 2020

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Homebuilder confidence has continued to decline in the month of June, according to a report released by the National Association of Home Builders on Wednesday.

The report showed the NAHB/Wells Fargo Housing Market Index fell to 67 in June from 69 in May. Economists had expected the index to edge down to 68.

With the bigger than expected decrease, the housing market index dropped to its lowest reading since June 2020.

"Six consecutive monthly declines for the HMI is a clear sign of a slowing housing market in a high inflation, slow growth economic environment," said NAHB Chairman Jerry Konter. "The entry-level market has been particularly affected by declines for housing affordability and builders are adopting a more cautious stance as demand softens with higher mortgage rates."

He added, "Government officials need to enact policies that will support the supply-side of the housing market as costs continue to climb."

The decrease by the HMI came as the component charting traffic of prospective buyers fell to 48 in June from 53 in May, marking the first time this gauge has fallen below the breakeven level of 50 since June 2020.

The index gauging current sales conditions also edged down to 77 in June from 78 in May, while the gauge measuring sales expectations in the next six months slipped to 61 from 63.

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