Homebuilder confidence dipped slightly in June, with the National Association of Home Builders on Tuesday reporting a confidence index of 80, down from 81 in May. While the recent readings are below the peak of 90 reached last November, they are still above the pre-pandemic high of 76 reached in December 2019.
The confidence among homebuilders led to housing starts rising 6.3% in June, to 1.64 million. This figure is well above the 1.5 million homes necessary to maintain an equilibrium in the housing market—which is welcome news to the droves of prospective homebuyers who continue to drive market demand.
Housing market bears will point to the 5.1% decline in permits to just below 1.6 million as a sign of softening in the market and a leading indicator that the housing market is cooling. This dip, however, is likely because of homebuilders clearing out their old inventories of permits as they pulled back in recent months as they faced concerns about runaway material prices, in particular lumber.
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