The National Association of Home Builders released a report on Monday showing a modest deterioration by U.S. homebuilder confidence in the month of August.
The report said the NAHB/Wells Fargo Housing Market Index edged down to 32 in August after inching up to 33 in July. Economists had expected the index to come in unchanged.
“Affordability continues to be the top challenge for the housing market and buyers are waiting for mortgage rates to drop to move forward,” said NAHB Chairman Buddy Hughes.
He added, “Builders are also grappling with supply-side headwinds, including ongoing frustrations with regulatory policies connected to developing land and building homes.”
The modest decrease by the headline index came as the index gauging current sales conditions slipped to 35 in August from 36 in July.
Meanwhile, the component measuring sales expectations in the next six months held steady at 43, and the gauge charting traffic of prospective buyers rose to 22 in August from 20 in July.
The NAHB said the latest HMI survey also revealed that 37 percent of builders reported cutting prices in August, down from 38 percent in July.
The average price reduction was 5 percent in August, the same as it’s been every month since last November, the NAHB said.
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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