Mubasher: US home builder sentiment continued to improve in August, with a firm demand for single-family houses, but  construction costs were surging amid excessive regulations, lack of spaces for building and surging construction costs, according to a builder lobby group.

The National Association of Home Builders’ (NAHB) monthly confidence index, which gauges the newly-built single family home market outlook, rose by one point to 66 in August.

“While 30-year mortgage rates have dropped […] to 3.6% during the past four months, we have not seen an equivalent higher pace of building activity because the rate declines occurred due to economic uncertainty stemming largely from growing trade concerns,” NAHB’s senior economist Robert Dietz said.

The current sales conditions index, which is one of the components of the overall NAHB index, advanced by two points to 73, while the gauge of the expected sales in the coming six months shed two points to 70, with the buyer traffic tracker gaining two points to 50.

“Although affordability headwinds remain a challenge, demand is good and growing at lower price points and for smaller homes,” Dietz said.