Builder sentiment dropped one point to 32 in August; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to NAHB. It reached a record high of 90 in November 2020.
Regarding the three components of the homebuilder index, sales expectations held steady at 43; current sales conditions fell one point to 35; and buyer traffic rose two points to 22.
Thirty-seven percent of builders reported cutting prices in August compared with 38% in July, 37% in June and 34% in May. The average price discount remained at 5% for the month. Sixty-six percent of builders were using sales incentives other than price cuts to improve sales in August, which is up from 62% in July.
“Affordability continues to be the top challenge for the housing market and buyers are waiting for mortgage rates to drop to move forward,” said NAHB Chairman Buddy Hughes. “Builders are also grappling with supply-side headwinds, including ongoing frustrations with regulatory policies connected to developing land and building homes.”
