NAHB housing market index drops slightly in June but remains solid

The National Association of Home Builders Housing Market Index softened a bit in June. The index dropped by two points to a level of 67 from a downwardly revised May reading of 69. The drop was mainly because of a huge decline in the West.

NAHB Chairman Granger MacDonald stated that the levels of builder confidence levels have stayed consistently sound in 2017, reflecting the ongoing gradual rebound of the housing market.

“As the housing market strengthens and more buyers enter the market, builders continue to express their frustration over an ongoing shortage of skilled labor and buildable lots that is impeding stronger growth in the single-family sector,” said NAHB Chief Economist Robert Dietz.

In spite of the two point fall, the housing demand continues to remain healthy and consistent with the six-month average of 68 points. Furthermore, this marks the highest June print of the index since 2005, noted Wells Fargo in a research report. The present and future sales demand fell two points to 73 and 75, respectively.

The drop was mainly due to the West region’s decline of 9 points on the month to a still sound level of 71 points. The West region is the most supply constrained region, and the shortage of lots and workers are expected to have been behind the month decline, as opposed to a softening in demand. Meanwhile, the Midwest region recorded a rebound of 4 points to 69, while the Northeast and South regions recorded slightly declines, remaining near six-month averages.