Optimism within the home-building industry remained at its lowest level in 12 months, and pessimism is setting in as a result of a new round of tariffs.
As of September, the National Association of Home Builders/Wells Fargo Housing Market Index came in at 67.
A level in excess of 50 for the index, which is seasonally adjusted, is an indication that
more builders view conditions as good than poor.
While there was no change from last month in the index, it remained at its lowest level since it was 64 in September 2017.
After the index was released Thursday, NAHB Chairman Randy Noel issued a statement
warning that the Trump administration’s tariffs on $200 billion in Chinese imports — including $10 billion in goods used by the residential construction sector — “could have major ramifications for the housing industry.”
He explained that the latest action is on top of the 20 percent tariff on softwood lumber imports from Canada — which has already increased new home prices by thousands of dollars.
“With America facing a housing affordability crisis, it is counterproductive to enact policies that will needlessly drive up the cost of housing,” Noel stated. “We respectfully urge the administration to change course and work to resolve these trade disputes in a manner that won’t harm American businesses and consumers.”
One of three component indices that make up the HMI, buyer traffic, was unchanged from August at 49. The component measuring current sales was up a point to 74, while the index for expectations over the next six months shot up 2 points to 74.
No change in the three-month moving average left the index in the South at 70. A 1-point drop put the West’s index at 73, and the Midwest sank 3 points to 59.
But in the Northeast, the index rose a point to 54.
Noel noted in the report that demand for housing remains firm — especially for millennials and other new market entrants.
