WASHINGTON (dpa-AFX) - Despite rising construction costs, a chronic shortage of workers and a lack of buildable lots, the National Association of Home Builders released a report on Thursday showing an unexpected uptick in U.S. homebuilder confidence in the month of August.
The report said the NAHB/Wells Fargo Housing Market Index inched up to 66 in August after ticking up to 65 in July. Economists had expected the index to come in unchanged.
'While 30-year mortgage rates have dropped from 4.1 percent down to 3.6 percent during the past four months, we have not seen an equivalent higher pace of building activity because the rate declines occurred due to economic uncertainty stemming largely from growing trade concerns,' said NAHB Chief Economist Robert Dietz.
He added, 'Although affordability headwinds remain a challenge, demand is good and growing at lower price points and for smaller homes.'
The unexpected uptick by the HMI came as the components gauging current sales conditions and traffic of prospective buyers both rose by two points to 73 and 50, respectively.
On the other hand, the NAHB said the measure charting sales expectations in the next six months edged down by one point to 70.
The Commerce Department is scheduled to release a separate report on new residential construction in the month of July on Friday.
Economists expect housing starts to rise to an annual rate of 1.257 million in July after falling to a rate of 1.253 million in June.
Building permits, an indicator of future housing demand, are expected to jump to a rate of 1.270 million in July after plunging to a rate of 1.220 million in June.
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