Builder Confidence Edges Lower on Inflation Concerns
Rising inflation concerns and ongoing supply chain disruptions snapped a four-month rise in builder sentiment, even as consumer demand remained robust, the National Association of Home Builders reported Tuesday.
The NAHB/Wells Fargo Housing Market Index found builder confidence in the market for newly built single-family homes moved one point lower to 83 in January. The HMI has hovered at the 83 or 84 level, the same rate as spring 2021, for the past three months.
The HMI index gauging current sales conditions held steady at 90; the gauge measuring sales expectations in the next six months fell two points to 83; and the component charting traffic of prospective buyers also posted a two-point decline to 69.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell one point to 73, the Midwest increased one point to 75 and the South and West each posted a one-point rise to 88, respectively.
“While lean existing home inventory and solid buyer demand are supporting the need for new construction, the combination of ongoing increases for building materials, worsening skilled labor shortages and higher mortgage rates point to declines for housing affordability in 2022,” said NAHB Chief Economist Robert Dietz.
The NAHB report is the first of several housing reports coming out this week and next. On Wednesday morning, HUD and the Census Bureau release its monthly New Residential Construction report for December; on Thursday, the Mortgage Bankers Association releases its monthly Builder Applications Survey and the National Association of Realtors releases its monthly Existing Home Sales report for December.
On Tuesday, Jan. 24, the S&P CoreLogic Case-Shiller Home Price Indexes come out; and on Wednesday, Jan. 26, HUD/Census releases its monthly New Residential Sales report for December.