Builder Confidence Hit Low Point in August

The National Association of Home Builders' sentiment index dropped by one point to a 67 reading in August, the lowest score in 11 months.

NAHB chairman and Louisiana home builder Randy Noel attributes the drop to concerns regarding affordability and rising costs, along with less land and fewer skilled laborers, but points out, "The good news is that builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations." New home sales and applications for mortgages to purchase a home also dropped, CNBC reports.

Builders are also concerned that material prices will increase even more as President Donald Trump ramps up pressure on trading partners. "Builders continue to monitor how tariffs and the growing threat of a trade war are affecting key building material prices, including lumber," said NAHB chief economist Robert Dietz. "These cost increases, coupled with rising interest rates, are putting upward pressure on home prices and contributing to growing affordability challenges."

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