The confidence of homebuilders stagnates as tariffs weigh

Numbers: The monthly confidence index of the National Association of Home Builders remained unchanged at 67 in September.

What happened: The follow-up of the feeling of the builders corresponded to the consensual Econoday forecast of a flat reading. This is a level that the industry group qualifies as "strong", but it is below the 2017 annual average and is the low of 2018, signaling that the recovery of housing construction could be out of breath.

The components of the index were mixed. The measurement of current sales conditions increased by one point to reach 74 and the measure of expectations for the next six months increased by two points to reach 74. But the sub-index that tracks buyer traffic remained unchanged at 49.

Readings on 50 signal enhancement conditions.

Lily: Housing sales hit a new low in July as the real estate market looks for direction

Big picture: The rates are not helping home builders, who are still struggling with the same headwinds they have seen since the slow start of housing recovery several years ago. "Housing affordability is becoming a challenge as builders face overly burdensome regulations and rising materials costs, exacerbated by escalating trade," said Rob Dietz, an economist with head of the NAHB.

The confidence index is closely monitored to see if builders will launch more housing projects. The Commerce Department will release data on new construction launched in August on Wednesday, and the MarketWatch consensus forecasts a growth rate of 1.243 million households, up nearly 1 percent from July.

What they say: "The demand for mortgages has increased in August, so we expect a slight, probably temporary, rise in the NAHB index to 68," Ian Shepherdson, chief economist at Pantheon Macro, said before the release. "But the underlying trend is slowly deteriorating," added Shepherdson, who was particularly bearish on the housing economy.

Market reaction: Builder stocks have been pegged this year as investors anticipate slower housing growth and higher costs for construction companies. Shares of PulteGroup, Inc.

PHM, + 0.69%

and KBHome

KBH, + 1.27%

are down 20% during this period.

Read also"Buyers are" tired "," exhausted ", but continued to look for their home even in August, according to realtors