Dive Brief:
- The National Association of Home Builders/Wells Fargo Housing Market Index inched down one point from a June score of 60 to a July reading of 59, the NAHB reported Monday.
- All three elements within the index – builder perceptions of single-family home sales (-1 point), sales expectations for the next six months (-1) and traffic of prospective buyers (-3) – contracted slightly due to the ongoing dearth of land and labor plus the burden of regulation.
- July's HMI reading, said NAHB Chairman Ed Brady, still falls within "a relatively narrow positive range" that is indicative of a cautious housing recovery.
Dive Insight:
The West's score (69) came in the highest of all regional Index readings, followed by the South (61), Midwest (57) and Northeast (39).
NAHB Chief Economist Robert Dietz said job growth, continuing low mortgage rates and an uptick in the formation of new households – all factors that should help the housing recovery along – should keep drawing more buyers into the housing market for the remainder of 2016.
As indicated by Brady, despite a steady confidence reading, labor and land continue to challenge the single-family home industry. Earlier this month, the NAHB reported that the shortage of land in some areas – the Pacific region markets of Portland, OR, Seattle and San Francisco in particular – have forced 2015 median lot sizes to record lows of 8,600 square feet or less. In the tightest markets, half of all lot sizes were 0.15 acres or less. In June, another NAHB report, which focused on nine primary trades, found that 59% of single-family builders were having a tougher time finding skilled workers and subcontractors than they were a year ago, up 35% from 2012. Carpenters, framers and bricklayers were reportedly the trades in the shortest supply.
