Builder confidence slid in January as the nation faced climbing Covid-19 caseloads and homebuilders confronted surging lumber prices, the National Association of Home Builders/Wells Fargo Housing Market Index released Wednesday showed.
Builder confidence in the market for newly built single-family homes slipped three points to 83 this month.
“Despite robust housing demand and low mortgage rates, buyers are facing a dearth of new homes on the market, which is exacerbating affordability problems,” NAHB Chairman Chuck Fowke said. “Builders are grappling with supply-side constraints related to lumber and other material costs, a lack of affordable lots and labor shortages that delay delivery times and put upward pressure on home prices. They are also concerned about a changing regulatory environment.”
The HMI index gauging current sales conditions dropped two points to 90, while the component measuring sales expectations in the next six months fell two points to 83 and the gauge charting traffic of prospective buyers decreased five points to 68.
In the Northeast, the HMI was down six points to 76. The Midwest climbed two points to 83, the South fell one point to 86, and the West fell one point to 95.
“While housing continues to help lead the economy forward, limited inventory is constraining more robust growth,” NAHB Chief Economist Robert Dietz said. “A shortage of buildable lots is making it difficult to meet strong demand and rising material prices are far outpacing increases in home prices, which in turn is harming housing affordability.”