For the fourth straight month, the Housing Market Index (HMI) — a measure of homebuilder confidence nationwide — has dropped. Builders are citing rising costs for materials and fewer lots and laborers as reasons for the downgrade.
Yet, despite their lesser confidence levels, builder sales expectations for the upcoming 6 months is as high as its been since 2007.
Put it all together, and we see builders with bigger sales and smaller margins. The news could prove costly for today’s new construction buyers. Builders may be even less willing to negotiate with a buyer as the year progresses forward.