NAHB: Home Builder Confidence Dipped in February

February 20, 2013
Last updated:
March 4, 2022
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Home builder confidence declined in February for the second month in a row. Builders experienced a slew of delayed projects and soaring construction costs. 

The national reading for home builder confidence dipped to an index reading of 82 in February 2022; the National Association of Home Builders predicted a reading of 83. Component readings for February’s national index readings were mixed.

Builder confidence in current market conditions for single-family homes rose one point to 90. Builder confidence in market conditions for single-family homes in the next six months fell two points to 80.

Readings over 50 indicate a majority of builders are positive about housing market conditions. Buyer traffic readings published before the pandemic rarely exceeded index readings of 50.

Regional Home Builder Confidence Varied

Regional readings for home builder confidence varied in February. The Northeast region reported an index reading of 76, which was 3 points higher than in January. The Midwestern region’s February reading was 73, and in the South it was 86. Homebuilder confidence in the West was up 1 point to an index reading of 89.

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High Demand for Homes Persists as Materials Costs Limit Affordability

Shortages of available pre-owned homes continued to boost new home sales, but rising materials costs and supply chain issues presented ongoing challenges to builders. NAHB Chair Fowkes said, “The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances, and other building materials.”

Affordability is a substantial obstacle for first-time and moderate-income home buyers. Prices of pre-owned homes are rising at their fastest pace in 15 years as mortgage rates move higher. NAHB Chair Fowkes also said, “Though builders are seeking to keep prices affordable…policymakers must find ways to increase the supply of building materials as the economy runs hot.

Homebuilders and potential home buyers can expect ongoing challenges in 2022. As home prices rise, fewer families can enter the housing markets; other potential buyers may decide to postpone buying homes until home price growth eases.

What is the NAHB?

The National Association of Home Builders (NAHB) is among the biggest trade associations in the US. The various groups within the NAHB assess the housing finance system and policy issues, forecast consumer and economic trends, and take steps towards improving the housing finance system. The entity works with federal agencies to help regulate factors that impact the housing industry in in terms of factors such as energy, finance, and the environment.

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