Builder Confidence Drops, Signaling Trouble For The Housing Market

Builder confidence dropped two points in June to its lowest level since June 2020, according to the National Association of Home Builders(NAHB)/Wells Fargo Housing Market Index (HMI). The HMI asks builders for their opinions on current single-family home sales and sales expectations for the next six months, as well as rate their traffic of prospective buyers. Any number under 50 indicates that more builders view conditions as worse than better. The HMI posted a reading of 67 for the month of June. It is the sixth consecutive month of decline for the index. NAHB’s press release called it a “troubling sign for the housing market.” “Six consecutive monthly declines for the HMI is a clear sign of a slowing housing…

Builder Confidence Falls, Signaling A Market Slowdown

Builder confidence fell eight points in May, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The HMI registered a reading of 69 in May, a significant drop from April. This is the fifth consecutive month of decline and the lowest reading since June 2020. The low reading suggests that the housing market is slowing thanks to affordability challenges. “The housing market is facing growing challenges. Building material costs are up 19% from a year ago, in less than three months mortgage rates have surged to a 12-year high and, based on current affordability conditions, less than 50% of new and existing home sales are affordable for a typical family,”  said NAHB Chief Economist Robert…

Builder Profits Fell In 2020, The First Drop Since 2008

Builder gross profit margins fell to 18.2% in 2020, while net profits slipped to 7%, according to NAHB Builders’ Cost of Doing Business Study. This is the first profit margin decline since 2008. The study surveyed single-family builders across the U.S. It found that builders averaged $13.7 million in revenue for the fiscal year of 2020, of which $11.2 million (81.8%) was spent on costs of sales, such as land costs and construction costs. An additional $1.5 million (11.2%) was spent on operating expenses, such as marketing, administrative expenses, and owner’s compensation.  The study notes that shutdowns related to Covid-19 played a part in the results, as well as the need to navigate work-from-home models, supply-chain disruptions, and labor shortages.…

Builder Confidence Drops As Covid Cases Rise

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…

Builder Confidence Surges In June

Two months after things looked bleak, builder confidence surged in June as the nation takes additional steps to reopen after the economic shutdowns in reaction to the COVID-19 pandemic. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released Tuesday found builder confidence in the market for newly built single-family homes increased 21 points to 58. Anything about 50 reflects a positive view of the market. “Housing clearly shows signs of momentum as challenges and opportunities exist in the single-family market,” NAHB Chief Economist Robert Dietz said. “Builders report increasing demand for families seeking single-family homes in inner and outer suburbs that feature lower density neighborhoods. At the same time, elevated unemployment and the risk of new, local…

Builder Confidence In Multifamily Market Drops

Builder confidence in the market for new multifamily housing plummeted in the first quarter of 2020, according to a survey released Thursday by the National Association of Home Builders. The Mutlifamily Production Index – which measures builder and developer attitudes about the apartment and condo market – fell to 27, down 22 points from the previous quarter. The index is on a scale of 0 to 100, with a number below 50 indicating that more respondents believe conditions are getting worse than those reporting conditions are improving. The index is at its lowest level since the fourth quarter of 2009. “Like other sectors of the housing market, the multifamily market has been greatly affected by the effects of the pandemic,”…