The numbers: High inflation and persistent shortages of key supplies slightly dimmed the optimism of home builders early in the new year. The National Association of Home Builders’ confidence index slipped 1 point to 83.
Big picture: Rising home prices and higher mortgage rates could turn off some potential buyers. The survey was taken during the first two weeks of January and did not fully include the recent jump in mortgage rates.
There’s still plenty of demand for homes, however. The biggest obstacles are ongoing shortages of labor and supplies as well as higher costs for materials such as lumber.
Looking ahead: “Higher material costs and lack of availability are adding weeks to typical single-family construction times,” said NAHB Chairman Chuck Fowke, a custom home builder from Tampa, Fla. “NAHB analysis indicates the aggregate cost of residential construction materials has increased almost 19% since December 2021. Policymakers need to take action to fix supply chains.”
