WASHINGTON, DC Strong consumer demand helped push builder confidence higher in October despite growing affordability challenges stemming from rising material prices and shortages, the National Association of Home Builders reported.
According to the Washington, DC-based NAHB, builder sentiment in the market for newly built single-family homes moved four points higher to 80 in October, according to the latest monthly NAHB/Wells Fargo Housing Market Index (HMI), released this week.
The NAHB also reported that single-family housing production held steady in September, at a seasonally adjusted annual rate of 1.56 million units, as strong demand helped to offset ongoing building material supply chain disruptions.
“Although demand and home sales remain strong, builders continue to grapple with ongoing supply chain disruptions and labor shortages that are delaying completion times and putting upward pressure on building material and home prices,” said NAHB Chairman Chuck Fowke.
“Builders are getting increasingly concerned about affordability hurdles ahead for most buyers,” added NAHB Chief Economist Robert Dietz. “Building material price increases and bottlenecks persist, and interest rates are expected to rise in coming months as the Fed begins to taper its purchase of U.S. Treasuries and mortgage-backed debt.
“Policymakers must focus on fixing the broken supply chain,” Dietz observed. “This will spur more construction and help ease upward pressure on home prices.”
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