"The HMI shows that single-family housing is making solid progress," said NAHB Chairman Tom Woods, a homebuilder from Blue Springs, Missouri, in a release. "However, our members continue to tell us that they are concerned about the availability of lots and labor."
The index was not entirely positive, though. Of its three components, current sales conditions rose one point to 67, but sales expectations over the next six months fell two points to 68. The component measuring buyer traffic did rise two points to 47, but is still in negative territory.
Another index gauging homebuyer traffic, from Credit Suisse, showed a decline in August, "indicating relatively softer trends in the markets most important for builders."
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Real estate agents have reported growing price fatigue among potential buyers. The premium for new construction compared to existing homes is currently wider than usual. Homebuilders have been able to raise prices more because there is such short supply of all homes available for sale.
Single family housing starts rose an impressive 12.8 percent in July from June, according to the U.S. Census. Building permits, however, an indicator of future construction, fell 1.9 percent.