Builder sentiment decreased one point to 82 in February as homebuilders face growing expenses and delays, according to cnbc.com. It reached a record high of 90 in November 2020.
Any reading above 50 indicates a positive market; the National Association of Home Builders/Wells Fargo Housing Market Index had fallen to 30 in April 2020.
Of the homebuilder index’s three components, current sales conditions rose one point to 90; sales expectations in the next six months fell two points to 80; and buyer traffic decreased four points to 65.
Although demand remains strong, supply chain challenges still are affecting homebuilders and causing delays.
“Production disruptions are so severe that many builders are waiting months to receive cabinets, garage doors, countertops and appliances,” said NAHB Chairman Jerry Konter, a builder from Savannah, Ga. “These delivery delays are raising construction costs and pricing prospective buyers out of the market.”
Additionally, homebuyers are finding affordability to be a challenge as they face climbing interest rates and surging lumber prices that add thousands of dollars to the cost of new homes.