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Tuesday, December 7, 2021
ArlingtonReal EstateDespite concerns, home-builder confidence edges up

Despite concerns, home-builder confidence edges up

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Builder confidence inched up in September on lower lumber prices and strong housing demand, even as the housing sector continues to grapple with building-material supply-chain issues and labor challenges, according to a monthly survey.

Ending a three-month decline, builder sentiment in the market for newly built single-family homes edged up one point to 76 on a 0-to-100 scale in September, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

“Builder sentiment has been gradually cooling since the HMI hit an all-time high reading of 90 last November,” said NAHB chairman Chuck Fowke, a custom builder from Tampa. “The September data show stability as some building material cost challenges ease, particularly for softwood lumber. However, delivery times remain extended and the chronic construction labor shortage is expected to persist as the overall labor market recovers.”

“Regionally, we continue to see growth in the South and the West, particularly the Mountain West,” said Robert Dietz, chief economist for NAHB. “Exurban markets have expanded the most over the last year, although inner suburbs are now experiencing an acceleration, with townhouse construction having had the best quarter in 14 years this spring.”

The HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index.

The HMI index gauging current sales conditions rose one point to 82; the component measuring traffic of prospective buyers posted a two-point gain to 61; and the gauge charting sales expectations in the next six months held steady at 81.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell two points to 72, the South dropped two points to 80 and the West registered a two-point decline to 83. The Midwest remained unchanged at 68.

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