Builder confidence declined two points in December to a level of 31 on the National Association of Home Builders/Wells Fargo Housing Market Index. It is the lowest level recorded since mid-2012, not including the pandemic-impacted spring of 2020. Confidence levels above 50 indicate most builders feel positively about the market. Builder confidence declined every month in 2022.
Builder confidence declined every month in 2022.
NAHB credited high inflation and high mortgage rates for the continued decline in builder sentiment.
“The silver lining in this report is that it is the smallest drop in the index in the past six months, indicating that we are possibly nearing the bottom of the cycle for builder sentiment,” stated NAHB Chief Economist Robert Dietz. “Mortgage rates are down from above 7% in recent weeks to about 6.3% today, and for the first time since April, builders registered an increase in future sales expectations.”
Dietz added that NAHB anticipates weaker housing conditions to persist in 2023, with recovery expected in 2024.
