Builder confidence declined one point in January to a level of 83 on the National Association of Home Builders/Wells Fargo Housing Market Index.
The index—which reached record highs and record lows in 2020—has hovered steadily around 84 or 83 for the past three months.
NAHB attributes the slight January decline to growing inflation concerns among home builders.
"While lean existing home inventory and solid buyer demand are supporting the need for new construction, the combination of ongoing increases for building materials, worsening skilled labor shortages and higher mortgage rates point to declines for housing affordability in 2022,” NAHB Chief Economist Robert Dietz said in a statement.
Builder confidence levels above 50 are considered positive.