June’s home builder index dropped to a nine-month low, with a monthly Housing Market Index (HMI) drop of three points, resulting in a 13, MarketWatch reported.
Previously, the 16-point-index that we saw in April was predicted to continue into June, according to economists polled by MarketWatch. May’s HMI was also a 16.
“Builders are being squeezed by the continuing weakness in existing-home prices — against which they must compete — as well as rising material costs,” said NAHB Chairman Bob Nielsen in a statement.
“Rising costs for materials such as roofing, copper, wallboard, vinyl siding and other components have made it extremely difficult to construct a new home and sell it at a price that covers the costs,” Nielsen added.
A HMI score indicating “that more builders view sales conditions as good than poor” (denoted by a number above 50) has not been seen since April 2006.
“The Northeast was the only region to post a gain in its HMI score for this June, rising two points to 17. Meanwhile, the Midwest dropped three points to 11, South dropped two points to 14 and the West posted a four-point decline to 12,” said NAHB in a news release.