Builder confidence dropped 12 points in July to a level of 55, the lowest reading since May 2020, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
It is also the second largest single-month drop in the history of the index, the largest being the 42% plunge caused by the start of the pandemic in April 2020.
“Affordability is the greatest challenge facing the housing market,” stated NAHB Chief Economist Robert Dietz. “Significant segments of the home buying population are priced out of the market.”
Many builders have reported construction halts due to costs, according to NAHB.
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