U.S. builder confidence for new single-family homes in July dropped for the seventh consecutive month, decreasing 12 points from June to 55, the lowest reading in two years, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI component gauging current sales conditions plunged 12 points to 64 and the measurement of sales expectations in the next six months shrunk 11 points to 50 in July. The component measuring prospective buyer traffic declined eleven points from May to 37.
Derived from a monthly NAHB survey, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months. Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good rather than poor. See NAHB