The headline NAHB sentiment index fell in June from 69 to 67 (as expected), with all three sub-indices tumbling back below pre-COVID levels. The group’s gauge of prospective buyer traffic fell five points to 48, the lowest since June 2020. The measure of present sales also declined to a two-year low, and sales expectations for the next six months dropped to the lowest since May 2020.
That is the sixth straight month of declines and the headline is now at the lowest in two years.
“The housing market faces both demand-side and supply-side challenges,” Robert Dietz, chief economist at the NAHB, said in a statement.
“Residential construction material costs are up 19% year-over-year with cost increases for a variety of building inputs.”
“On the demand-side of the market, the increase for mortgage rates for the first half of 2022 has priced out a significant number of prospective home buyers,” he said.
By region, builder sentiment declined in three of four regions. Sentiment improved in the Midwest.
Homebuilder sentiment has a long way to go to catch down to homebuyer sentiment...
But as Upton Sinclair is often cited as saying: "It is difficult to get a man to understand something when his salary depends on his not understanding it."