“NAHB’s forecast model suggests single-family construction will continue to expand despite this change in conditions,” added Dietz. “The top reason for this expectation is the fact that there is such a large degree of underbuilding in single-family markets, with just over 900,000 single-family starts expected this year, compared with the 1.2 million we believe the market could absorb.”

Dietz did make a call upon lawmakers to take notice of the current economic conditions in the housing market, particularly with respect to affordability. With the capital markets relatively focused on the current bull run in the stock market and trade wars, it would be careless economic policy to ignore the housing market as it comprises 15-18% of the gross domestic product.

“For policymakers and community leaders concerned about affordability declining due to macroeconomic conditions, there’s no better time to try to reduce regulatory costs associated with home construction,” said Dietz. “Ultimately, additional supply will help reduce the cost of the American dream.”

Homebuilder Confidence Strong

Despite rising rates, the National Association of Home Builders released a separate report that showed homebuilder confidence in the U.S. held steady during the month of July. Additionally, the report stated that the NAHB/Wells Fargo Housing Market Index was unchanged in July after dipping to 68 in June.

“Consumer demand for single-family homes is holding strong this summer, buoyed by steady job growth, income gains and low unemployment in many parts of the country,” said NAHB Chairman Randy Noel.

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