Builder confidence in the newly built single-family housing market dropped two points in June to a level of 64 on the National Association of Home Builders/Wells Fargo Housing Market Index.
Despite the decline, builder sentiments have remained in the low-to-mid 60s on the index for the past five months, signaling steady confidence levels, according to the NAHB.
“While demand for single-family homes remains sound, builders continue to report rising development and construction costs, with some additional concerns over trade issues,” NAHB Chairman Greg Ugalde said in a statement.
Home prices also remain somewhat high compared with incomes, presenting a challenge for entry-level home buyers, NAHB Chief Economist Robert Dietz added.
"And while new home sales picked up in March and April, builders continue to grapple with excessive regulations, a shortage of lots and lack of skilled labor that are hurting affordability and depressing supply,” Dietz stated.
