Builder Confidence Edges Higher; New York Manufacturing Accelerates — Evening Brief – 08.17.26
U.S. home builders remained cautious in August as elevated mortgage rates and affordability pressures constrained demand, while a separate regional manufacturing survey showed factory activity expanding at its fastest pace in more than four years.
The National Association of Home Builders/Wells Fargo Housing Market Index increased to 35 from 34 in July, exceeding the consensus estimate of 33. Readings below 50 indicate that more builders view conditions as poor than good.
The current-sales component rose two points to 39, while six-month sales expectations held at 43. Prospective-buyer traffic remained at 23, according to NAHB.
Builders continued using discounts to address affordability challenges. About 35% reduced prices in August, down from 37% in July, with an average reduction of 6%. Some 63% offered sales incentives.
“August marked the 16th straight month that at least 30% of builders reported cutting prices,” NAHB chief economist Robert Dietz said.
The average 30-year fixed mortgage rate was 6.67% as of Aug. 13, compared with 6.58% a year earlier, according to Freddie Mac.
Regional three-month averages remained uneven. The Northeast declined one point to 44, the Midwest held at 45, the South fell two points to 31 and the West remained at 27.
Meanwhile, the New York Federal Reserve’s Empire State Manufacturing Survey rose to 20.6 from 15.6, substantially exceeding the 10 consensus estimate. Positive readings signal expansion.
New orders remained strong at 17.3, although shipments declined to 11.7. Employment continued growing modestly, with its index at 9.3.
Cost pressures intensified. The prices-paid index rose to 58.6 from 52.3, while prices received fell to 22.7, suggesting manufacturers may face pressure on margins. Delivery times lengthened and inventories contracted.
The future-business-conditions index increased four points to 32.1, indicating manufacturers remained optimistic despite supply constraints and rising input costs.