Home Builder Confidence Up Despite Supply Chain Snags
Low inventories and strong buyer demand helped push builder confidence higher for the third consecutive month even as supply-side challenges – including building material bottlenecks and lot and labor shortages – remain stubbornly persistent, the National Association of Home Builders reported Tuesday.
The NAHB/Wells Fargo Housing Market Index reported builder sentiment in the market for newly built single-family homes moved three points higher to 83 in November. The HMI index gauging current sales conditions rose three points to 89, while the gauge charting traffic of prospective buyers also posted a three-point gain to 68. The component measuring sales expectations in the next six months held steady at 84.
Looking at the three-month moving averages for regional HMI scores, the Midwest rose four points to 72, the South posted a four-point gain to 84 and the West rose one point to 84. The Northeast fell two points to 70.
“The solid market for home building continued in November despite ongoing supply-side challenges,” said NAHB Chairman Chuck Fowke. “Lack of resale inventory combined with strong consumer demand continues to boost single-family home building.”
“In addition to well publicized concerns over building materials and the national supply chain, labor and building lot access are key constraints for housing supply,” said NAHB Chief Economist Robert Dietz. “Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions.”
Also on Tuesday, the Mortgage Bankers Association’s Builder Applications Survey data for October show mortgage applications for new home purchases increased by 6 percent from September, but decreased by 15.2 percent from a year ago. MBA estimated new single-family home sales at a seasonally adjusted annual rate of 897,000 units in October, an increase of 6.4 percent from the September pace of 843,000 units. On an unadjusted basis, MBA estimated 68,000 new home sales in October, an increase of 3 percent from 66,000 new home sales in September.