New home builders seem to be slowly getting their mojo
back. After recovering from the hit they took in the first days of the
pandemic, they encountered labor shortages, supply chain issues, and rising
material costs. The National Association of Home Builders (NAHB) said that
builder confidence in the new home market, driven by strong buyer demand, ticked
up slightly this month with the NAHB/Wells Fargo Housing Market Index (HMI) rising
1 point to 83. It is still down by 7 points from the all-time high it reached
in November. Robert Dietz, NAHB’s chief economist, said builders
continue to face challenges in order to add much needed new homes to the market.
While mortgage interest rates have trended higher since February and home
prices continue to outstrip inflation, housing demand appears to be solid for
now as buyer traffic reached its highest level since November. NAHB’s forecast
is for ongoing growth in single-family construction in 2021, albeit at a lower
growth rate than realized in 2020.