FILE - Contractors stand on the roof of a house under construction in Louisville, Kentucky, on July 1, 2022. Photographer: Luke Sharrett/Bloomberg via Getty Images Home builder confidence suffered a near-record drop in July as high inflation and climbing mortgage rates stalled the housing market by slowing sales and discouraging potential buyers.The National Association of Home Builders (NAHB) Housing Market Index (HMI) was released on Monday, showing how builder confidence in the market for newly-built, single-family homes dropped to 55.
It was the seventh straight monthly decline and a drop of 12 points since June, indicating a further sign of a weakening housing market, according to the NAHB.The July score marked the lowest index reading since April 2020 — which was 30 — when most of the country was under some form of lockdown at the height of the COVID-19 pandemic.
It also represented the largest single-month drop in the history of the HMI, except for the 42-point drop in April 2020.The HMI can range between 0 and 100.
Readings above 50 mean more builders view market conditions as good rather than poor — but experts said the July reading of 55 still represented additional signs of a weakening housing market. "Production bottlenecks, rising home building costs and high inflation are causing many builders to halt construction because the cost of land, construction, and financing exceeds the market value of the home," NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Ga., said in a statement. "In another sign of a softening market, 13% of builders in the HMI survey reported reducing home prices in the past month to bolster sales and/or limit cancellations," Konter added.The index is based on a.