Home builder confidence is holding steady in September, bolstered by strong buyer demand despite affordability concerns, according to the latest data from the National Association of Home Builders.
The current reading of the NAHB/Wells Fargo Housing Market Index was 67 points; readings over 50 points signify a positive sentiment. Year-over-year, builder confidence is up three points, but down from May's high reading of 70 points. Rising costs are a prime source of concern for builders, as the Trump administration tariffs threatened and imposed on Chinese products puts a $1 billion tariff on housing, CNBC reports. "Free trade is better for builders," says NAHB chief economist Robert Dietz, adding, "Housing affordability is becoming a challenge, as builders face overly burdensome regulations and rising material costs exacerbated by an escalating trade skirmish."
"Despite rising affordability concerns, builders continue to report firm demand for housing, especially as millennials and other newcomers enter the market," said NAHB Chairman Randy Noel, a custom homebuilder from LaPlace, Louisiana. "The recent decline in lumber prices from record-high levels earlier this summer is also welcome relief, although builders still need to manage construction costs to keep homes competitively priced."