Builder confidence in the market for newly built single-family homes moved two points lower to 79 in March from a downwardly revised reading in February, according to a recent National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This is the fourth straight month that builder sentiment has declined and the first time that the HMI has dipped below the 80-point mark since last September. Ongoing lumber and building material supply side constraints, rising construction costs, and expectations of higher interest rates continue to negatively affect builder sentiment, even as buyer demand remains relatively solid.
“While builders continue to report solid buyer traffic numbers, helped by historically low existing home inventory and a persistent housing deficit, increasing development and construction costs have taken a toll on builder confidence,” said Jerry Konter, NAHB chairman and a builder and developer from Savannah, Ga. “We call upon policymakers to act now to ease supply-chain woes. Improving access to lumber, OSB and other materials will help builders increase the supply of badly-needed housing and fight inflation.”