Builder Confidence Moves into Positive Territory in June
Builder’s confidence in newly built single-family homes has risen for the first time in 11 months due to a lack of existing inventory, and improving supply chain efficiency.
According to the National Association of Home Builders, builder confidence in the market for newly-built single-family homes in June rose five points to 55, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This marks the sixth straight month that builder confidence has increased and is the first time that sentiment levels have surpassed the midpoint of 50 since July 2022.
Builders are feeling cautiously optimistic about market conditions given low levels of existing home inventory and ongoing gradual improvements for supply chains,” – NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala.
“However, access for builder and developer loans has become more difficult to obtain over the last year, ultimately resulting in lower lot supplies as the industry tries to expand off cycle lows.”
“A bottom is forming for single-family home building as builder sentiment continues to rise from the beginning of the year gradually,” said NAHB Chief Economist Robert Dietz. “This month marks the first time in a year that both the current and future sales components of the HMI have exceeded 60, as some buyers adjust to a new normal in terms of interest rates. The Federal Reserve nearing the end of its tightening cycle is also good news for future market conditions in terms of mortgage rates and the cost of financing for builder and developer loans.”
Dietz further noted that the Fed and Washington policymakers must consider how the state of home building is critical for the inflation outlook and the future of monetary policy.
