Optimism among builders that new single-family homes will sell rose in September after declining for three months as lumber prices fell and buyers clamored for places to live.
The Housing Market Index from the National Association of Home Builders and Wells Fargo inched up one point to a seasonally adjusted 76. A reading above 50 for the index, which gauges builder perceptions of current and future single-family home sales, is generally positive, indicating that more say conditions are good rather than poor.
Sentiment has cooled since the index hit a high of 90 in November of 2020. The latest reading suggests that while the single-family market is still strong, it’s now more stable, NAHB Chief Economist Robert Dietz said in a statement.
Still, the housing industry is grappling with supply chain issues and difficulty hiring workers.
“Delivery times remain extended and the chronic construction labor shortage is expected to persist as the overall labor market recovers,” NAHB Chairman Chuck Fowke said in a statement.
Housing affordability will probably be another challenge on the demand side after home prices and construction costs surged in the past year, the NAHB said.
The index’s three-month average fell two points in three regions. In the Northeast, it dropped to 72, to 80 in the South and to 83 in the West. It stayed at 68 in the Midwest.
Exurban markets have expanded the most, though inner suburbs are accelerating. Townhouse construction had the best quarter it has had in 14 years this spring, he added.