U.S. Homebuilder Confidence Unexpectedly Improves Modestly In August

(RTTNews) - The National Association of Home Builders released a report on Monday unexpectedly showing a modest improvement in U.S. homebuilder confidence in the month of August.

The report said the NAHB/Wells Fargo Housing Market Index ticked up to 35 in August from 34 in July. Economists had expected the index to edge down to 33.

"While builder sentiment edged higher in August, builders continue to contend with high construction costs and broader economic uncertainty," said NAHB Chairman Bill Owens.

He added, "Rising gas and diesel prices are pushing up material costs, and spec home building remains weak as many prospective buyers stay on the sidelines."

The uptick by the headline index came as the index measuring current sales conditions increased to 39 in August from 37 in July.

Meanwhile, the indexes for future sales expectations and prospective buyer traffic held steady at 43 and 23, respectively.

The NAHB also said the latest HMI survey also revealed 35 percent of builders cut prices in August, down from 37 percent in July, and unchanged from June.

The average price reduction was 6 percent in August, the same rate as July, the report said, while the use of sales incentives was also unchanged from the previous month at 63 percent in August.