Homebuilder Confidence Remains High

Despite concerns over inflation, supply-chain disruptions and an ongoing labor shortage, homebuilder confidence remains high, according to CNBC. Builders continue to benefit from a low supply of existing homes for sale and housing demand remains strong even during the slow season for housing.

In December, builder sentiment in the single-family housing market rose one point to 84 on the National Association of Home Builders (NAHB) and Wells Fargo Housing Market Index (HMI), which is tied with February for the highest level of 2021 and is the fourth consecutive increase.

During the third quarter of 2021, single-family, built-for-rent construction starts reached the highest quarterly volume on record. Current sales conditions rose one point to 90, buyer traffic rose one point to 70 and sales expectations for the next six months stayed unchanged at 84 for the third consecutive month, according to HMI.

“While 2021 single-family starts are expected to end the year 24 percent higher than the pre-Covid 2019 level, we expect higher interest rates in 2022 will put a damper on housing affordability,” says NAHB chief economist Robert Dietz.

More complications are on the horizon. According to the U.S. Census, the cost of a newly built home jumped 17.5 percent year over year in October, and as the Federal Reserve curtails its support for mortgage-backed bonds, mortgage rates are expected to rise.

Learn more about the real estate market and why consumers are buying and selling here.