Builders Remain Confident In New Home Market

Home builders know the housing market better than most. That’s why the National Association of Home Builders surveys them each month to measure how confident they are in the market for newly built, single-family homes. After all, if builders are optimistic, it’s a good indicator that the market is strong and buyers are interested. According to the NAHB’s most recent release, they are and it is. Their January Housing Market Index scored an 83 on a scale where any number above 50 indicates more builders view conditions as good than poor. But while 83 is just below an all-time survey high, it’s a three point drop from last month. Robert Dietz, NAHB’s chief economist, says the decline is mostly due to the challenges of rising material costs and a lack of available lots. “While housing continues to help lead the economy forward, limited inventory is constraining more robust growth,” Dietz said. “A shortage of buildable lots is making it difficult to meet strong demand and rising material prices are far outpacing increases in home prices, which in turn is harming housing affordability.” (source)

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