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Builders Getting Bummed Out: Home Builders Sentiment unexpectedly drops in June, defying expectations for improvement

Jun 17, 2019

Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions
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  • Home Builders’ sentiment unexpectedly dropped in June while consensus was for it to improve
  • The National Association of Home Builders Housing Market Sentiment Index for June fell to 64 from 66 in May, consensus was for an improvement to 67
  • The reading was below all estimates in the market
  • Readings above 50 signify more builders see conditions as positive than not
  • Recent indications for the housing market were positive with mortgage applications and new home starts both rising in the last couple of months
  • Falling mortgage rates have also been bullish for housing

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  • But this reading throws cold water on those data points as all three components of the sentiment index were lower   
  • Home builders mentioned a number of concerns in their responses:
    • Rising costs for development and construction
    • Increasing trade concerns
    • Lack of labor in some housing markets
  • Data out Friday gave a mixed view of the US consumer with strong retails sales and industrial production contrasted by weaker consumer sentiment 
  • A rate cut is expected from the Federal Reserve in the second half of 2019, potentially softening some of the concerns for home builders
     

 

 

We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.
We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.

 

National Association of Home Builders Housing Market Sentiment Index - 3 Years

nahb sentiment index

Source: Bloomberg

 

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