Builder confidence slips again but remains solid

The confidence of builders in the market for newly-built single-family homes has slipped back another 2 points on the National Association of Home Builders/Wells Fargo index

Builder confidence slips again but remains solid
The confidence of builders in the market for newly-built single-family homes has slipped back another 2 points on the National Association of Home Builders/Wells Fargo index.  

Although the reading of 64 is still solid, it is the lowest mark since November 2016 and reflects concern of builders in several key factors.

“Our members are telling us they are growing increasingly concerned over rising material prices, particularly lumber,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is hurting housing affordability even as consumer interest in the new-home market remains strong.”

Components measuring current sales conditions, sales expectations and buyer traffic all slipped but remain solid. Regionally, the Northeast shows the strongest three-month moving average, with a 1-point drop for the West and Midwest and a 3-point drop for the South.

The National Association of Home Builders remains confident that buyers are still keen to buy new homes.

“The HMI measure of current sales conditions has been at 70 or higher for eight straight months, indicating strong demand for new homes,” said NAHB Chief Economist Robert Dietz. “However, builders will need to manage some increasing supply-side costs to keep home prices competitive.”

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