U.S. home builder confidence retreats despite lower mortgage rates
Adds background, quotes
June 17 (Reuters) - A private gauge of U.S. home builder sentiment fell in June, retreating from a six-month high, as rising building costs and trade worries offset falling mortgage rates.
The National Association of Home Builders and Wells Fargo said on Monday their index of builder confidence in newly built, single-family homes fell to 64 from 66 in May. Analysts polled by Reuters had forecast the reading to rise to 67.
“While demand for single-family homes remains sound, builders continue to report rising development and construction costs, with some additional concerns over trade issues,” NAHB Chairman Greg Ugalde said in a statement.
The NAHB index is seen as a proxy on domestic housing starts, which will be released on Tuesday at 8:30 a.m. EDT (1230 GMT). Analysts polled by Reuters forecast home builders likely broke ground at an annualized pace of 1.239 million units in May, compared with a 1.235 million pace in April.
The NAHB survey's components broadly weakened in June.
The gauge on current single-family home sales dipped to 71 from 72, while the barometer on prospective buyers decreased to 48 from 49.
The measure on expectations on home sales over the next six months fell to 70 from 72 in May.
“Despite lower mortgage rates, home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers,” NAHB Chief Economist Robert Dietz said in a statement.
Last week, interest rates on U.S. 30-year fixed-rate mortgages remained at 3.82%, their lowest levels since September 2017, Freddie Mac said.
(Reporting by Richard Leong Editing by Bill Trott)
((email@example.com; +1 646 223 6313; Reuters Messaging: firstname.lastname@example.org; Twitter @RichardLeong2))