This relatively slow week for U.S. economic data starts out with a report from the National Association of Home Builders (NAHB), which showed that builders this month were slightly less confident in the market for newly built, single-family homes. Specifically, the NAHB’s housing market index slid to 59 in July, worse than economists had predicted but still the 2nd-highest reading since January. Under the hood, gauges of current sales conditions and prospective buyer traffic cooled this month, and sales expectations for the next six months fell markedly. Regionally, builder sentiment improved over the past three months in the West but was unchanged everywhere else.
NAHB Chairman Ed Brady added that “For the past six months, builder confidence has remained in a relatively narrow positive range that is consistent with the ongoing gradual housing recovery that is underway. However, we are still hearing reports from our members of scattered softness in some markets, due largely to regulatory constraints and shortages of lots and labor.” A related Trulia analysis found that a growing number of homebuilders are reporting that they are less able to respond with new housing units to increasing demand because of local delays in getting building permits approved. For example, it now takes on average four months to get a housing building permit approved in Raleigh and Atlanta, and 8-12 months in parts of New York and California. We will find out more about this topic when tomorrow’s report on new residential construction in America is released by the U.S. Department of Commerce.
Sources: Econoday, NAHB, Trulia, WSJ, FRBSLPost author: Charles Couch