Builder sentiment declined to a four-month low in February, as material issues impacted construction prices and project timelines. XHB is down 0.43%, while ITB is down 0.70%.
- Builder confidence for newly-built single-family homes fell to 82 in February, down from 83 in January and 84 in February last year.
- The latest reading is the lowest in four months since the confidence level stood at 80 in October 2021.
- NAHC Chairman Jerry Konter attributed the decline to disruptions in production, with builders waiting for months to receive supplies.
- The delivery delays are driving construction costs higher, and pushing buyers out of the market.
- Regional construction costs are currently up 21% on a year-on-year basis, impacting first-time buyers.
- Housing affordability is expected to be impacted even more with higher interest rates this year, even with solid demand.
- The highest confidence level was recorded in the West region with 91, followed by the South with 84, the Northeast with 78, and the Midwest with 71.