In August, the NAHB Housing Market Index pulled back from its yearly highs, as there was a decline in builder confidence.
Key insights
On August 15, the National Association of Home Builders (NAHB) released its NAHB Housing Market Index report for August. The report revealed that the NAHB Housing Market Index declined from 56 in July to 50 in August, which was lower than the analyst consensus of 56.
According to the NAHB, the decline in builder confidence can be attributed to rising mortgage rates, which reached nearly 7% according to Freddie Mac, and persistently high shelter inflation. These factors have negatively affected housing affordability and dampened consumer demand.
In addition, traders also had the opportunity to review the Business Inventories report for June. The report showed that business inventories remained unchanged on a month-over-month basis, contrary to the analysts' expectation of a 0.1% growth.
Following these reports, the U.S. Dollar Index settled near the 103.00 level, experiencing some pressure against a broad basket of currencies as traders took profits near multi-week highs.
Gold traded near the $1905 level, largely unaffected by the housing market report as the commodity markets experienced a general pullback. Market sentiment for commodities was bearish on that day.
The S&P 500 tested session lows near the 4450 level after the release of the weaker-than-expected housing data. Traders expressed concerns that the increasing interest rates were putting significant pressure on the economy.
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