(RTTNews) - With high mortgage rates continuing to put a damper on sentiment, the National Association of Home Builders released a report on Tuesday showing homebuilder confidence in the U.S. unexpectedly edged lower in the month of July.
The report said the NAHB/Wells Fargo Housing Market Index dipped to 42 in July from 43 in June. Economists had expected the index to inch up to 44.
With the unexpected decease, the housing market index dropped to its lowest level since hitting 37 last December.
"While buyers appear to be waiting for lower interest rates, the six-month sales expectation for builders moved higher, indicating that builders expect mortgage rates to edge lower later this year as inflation data are showing signs of easing," said NAHB Chairman Carl Harris.
The NAHB said the index charting current sales conditions and the gauge charting traffic of prospective buyers both edged down to by one point to 47 and 27, respectively, while the component measuring sales expectations in the next six months crept up one point to 48.
The July HMI survey also revealed that 31 percent of builders cut home prices to bolster sales in July, above the June rate of 29 percent.
However, the average price reduction in July held steady at 6 percent for the 13th straight month, the NAHB said. Meanwhile, the use of sales incentives held steady at 61 percent in July.
