Homebuilder Confidence Drops as Affordability Declines

Source: NAHB

Homebuilder confidence slipped slightly in the first month of the year, dragged by affordability concerns during the month. XHB is down 2.50%.

• The NAHB/Wells Fargo Housing Market Index (HMI) stood at 83 in January, down from 84 in December 2020 and the same as the level recorded in January 2021.
• NAHB Chairman Chuck Fowke attributed the decline to the inflation uptick, with worsening skilled labor shortages and higher mortgage rates and building costs.
• Residential construction material costs have jumped by nearly 19% since December, citing the need for policymakers to take action against supply chain issues.
• The current sales conditions index was steady at 90, with the expectations index down by 2 points to 83.
• The index tracking traffic of prospective buyers also fell by 2 points to 69.
• Broken down per region, the Northeast HMI fell one point to 73, the Midwest HMI up a point to 75, and the South and West HMI both up a point to 88.