US homebuilder confidence dips in July

Homebuilder confidence in the US slipped in July, buffeted by supply-side headwinds relating to building materials, regulation and labor.

The National Association of Homebuilders' confidence index dipped from a reading of 81.0 for June to 80.0 in July (consensus: 81.0) - an 11-month low.

As an example of the shortages of key supplies faced by builders, NAHB chairman, Chuck Fowke, pointed to the price of oriented strand board, which had surged by a factor of five since January 2020.

"Builders are contending with shortages of building materials, buildable lots and skilled labor as well as a challenging regulatory environment," chipped in NAHB chief economist Robert Dietz.

"This is putting upward pressure on home prices and sidelining many prospective home buyers even as demand remains strong in a low-inventory environment."

By sub-indices, that for current sales slipped by one point to 86.0, that tracking the traffic of prospective buyers by six points to 65.0 and that for sales expectations over the next six months rose by two points to 81.0.

Commenting on the latest survey results, Ian Shepherdson, chief economist at Pantheon Macroeconomics said: "The media narrative of a booming housing market has proved very stubborn, but it is now starting to change amid abundant evidence that activity is falling.

"[...] What has changed for housing, we think, is the ending of the Covid-triggered rush to the suburbs. Demand has returned to its pre-Covid level, and sales volumes and prices have to adjust, downwards."