Builder Confidence Edges Lower on Inflation Concerns
Builder confidence is lower even as consumer demand remains robust.
Growing inflation concerns and ongoing supply chain disruptions snapped a four-month rise in builder sentiment, even as consumer demand remains robust, according to the most recent National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). 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 the spring of 2021, for the past three months.
“Higher material costs and lack of availability are adding weeks to typical single-family construction times,” said Chuck Fowke, NAHB chairman and a custom home builder from Tampa, Fla. “NAHB analysis indicates the aggregate cost of residential construction materials has increased almost 19% since December 2021. Policymakers need to take action to fix supply chains. Obtaining a new softwood lumber agreement with Canada and reducing tariffs is an excellent place to start.”