Low existing inventories and strong buyer demand helped push builder confidence higher for the third consecutive month even as supply-side challenges remain persistent, according to the NAHB.
The NAHB/Wells Fargo Housing Market Index (HMI), measuring builder sentiment in the market for newly built single-family homes, moved three points higher to 83 in November. In this seasonally adjusted index, any number above 50 indicates that more builders view conditions as good than poor.
“The solid market for home building continued in November despite ongoing supply-side challenges,” says NAHB chairman Chuck Fowke. “Lack of resale inventory combined with strong consumer demand continues to boost single-family home building.”
The HMI index gauging current sales conditions rose three points to 89 and 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.
At the regional level, the Midwest rose four points to 72, the South registered a four-point gain to 84, and the West rose one point to 84. The Northeast fell two points to 70.
“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,” says NAHB chief economist Robert Dietz. “Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions. Policymakers need to focus on resolving these issues to help builders produce more housing to meet strong market demand.”
