Mubasher: US home builder optimism declined in August, continuing the downward trend since May, but it remained firm during the month, data showed on Wednesday.

The National Association of Home Builders’ (NAHB) monthly confidence index, which gauges the newly-built single family home market outlook, inched down one point to 67 in August.

Meanwhile, analysts polled by MarketWatch expected a stable reading for the month.

The current sales conditions index, which is one of the components of the overall NAHB index edged down one point to 73, while the gauge of the expected sales in the coming six months ticked down to 72.

“Builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations,” NAHB chairman Randy Noel said.

“The solid economic expansion and firm job market should spur demand for new single-family homes in the months ahead,” NAHB chief economist Robert Dietz stated.

“Meanwhile, builders continue to monitor how tariffs and the growing threat of a trade war are affecting key building material prices, including lumber,” Dietz added.

It is worth noting that lumber and plywood prices rose 16.3% over the last 12 months, coupled with double-digit rises in other raw materials like aluminium, the Associated General Contractors of America reported in early August.

“These cost increases, coupled with rising interest rates, are putting upward pressure on home prices and contributing to growing affordability challenges,” Dietz said.

The US Commerce Department is set to release its data pertaining housing starts in July.