Builder confidence recorded its second consecutive month of decline, dropping three points to a level of 83 in January, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
"Despite robust housing demand and low mortgage rates, buyers are facing a dearth of new homes on the market, which is exacerbating affordability problems," stated NAHB Chairman Chuck Fowke. "Builders are grappling with supply-side constraints related to lumber and other material costs, a lack of affordable lots and labor shortages that delay delivery times and put upward pressure on home prices. They are also concerned about a changing regulatory environment."
January’s builder confidence level remains a strong one historically, however. The index set a record in November 2020 with a confidence level of 90. Builder confidence levels above 50 indicate more home builders view the market as positive than negative, according to NAHB.