The gauge measuring current sales conditions slipped one point to 37, the index tracking future sales expectations fell two points to 43, and the measure of prospective buyer traffic dropped two points to 23, a reading that suggests demand is not recovering at the ground level.
“Many potential buyers remain on the sidelines as they wait for lower mortgage rates, more certainty on inflation and a clearer economic outlook,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio.
Discounts and incentives deepen
Builders continued to lean heavily on price cuts and sales concessions to sustain demand. According to the July HMI survey, 37% of builders reduced prices, up from 35% in June and 32% in May, while the average price reduction held steady at 6%.
The share deploying sales incentives, including mortgage rate buydowns and closing cost assistance, ticked up to 63% from 62% the prior month, marking the 16th consecutive month the figure has reached 60% or higher.
The broader sales picture is equally subdued. New home sales fell for the second straight month in May to a seasonally adjusted annual rate of 580,000, down 7.3% from April and 6.8% below the year-ago pace, according to USÂ Census Bureau data.
