South of the border, homebuilders had never been feeling better just two months ago. Buyer demand, driven by the pandemic-induced desire for larger newer homes in the suburbs, had homebuilder sentiment at an all-time high. Now the rising cost of getting homes built is making builders less optimistic.
Builder confidence in the market for single-family homes fell three points in January to 83, according to the NAHB/Wells Fargo Housing Market Index. Anything above 50 is considered positive. Two months ago, the index hit a record high of 90. In January 2019, before the pandemic struck, it was at 75.
Of the index’s three components, current sales conditions dropped two points to 90. Sales expectations in the next six months fell two points to 83 and buyer traffic fell five points to 68.
On a three-month moving average for regional HMI scores, sentiment in the Northeast fell six points to 76. It rose two points to 83 in the Midwest. In the South, sentiment fell one point to 86 and in the West it dropped a point to 95.