Demand For Homes Keeps Builders Confident

The National Association of Home Builders surveys builders each month to gauge their confidence in the market for newly built single-family homes. Their responses are scored on a scale where any number above 50 indicates more builders view conditions as good than poor. In July, the index fell one point to 80. The decline was due to the continuing supply challenges facing home builders. Robert Dietz, NAHB’s chief economist, says conditions are putting upward pressure on prices. “Builders are contending with shortages of building materials, buildable lots, and skilled labor as well as a challenging regulatory environment,” Dietz said. “This is putting upward pressure on home prices and sidelining many prospective home buyers even as demand remains strong in a low-inventory environment.” But despite the challenges, elevated demand from buyers has kept builder confidence higher than normal. In fact, before last fall, the index had only been over 80 twice in its 35-year history. Its all-time high, reached in November 2020, is 90. (source)


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