Dec. Builder Confidence Down 4 Points to 86, but Still Near Record High
Washington, DC, December 16, 2020-Ending a string of three successive months of record highs, builder confidence in the market for newly built single-family homes fell four points to 86 in December, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today. Despite the decline, this is still the second-highest reading in the history of the series after last month’s 90.
“Housing demand is strong entering 2021, however the coming year will see housing affordability challenges as inventory remains low and construction costs are rising,” said NAHB chairman Chuck Fowke, a custom home builder from Tampa, Fla. “Policymakers should take note to avoid increasing regulatory costs associated with land development and residential construction.”
“Builder confidence fell back from historic levels in December, as housing remains a bright spot for a recovering economy,” said NAHB chief economist Robert Dietz. “The issues that have limited housing supply in recent years, including land and material availability and a persistent skilled labor shortage, will continue to place upward pressure on construction costs. As the economy improves with the deployment of a COVID-19 vaccine, interest rates will increase in 2021, further challenging housing affordability in the face of strong demand for single-family homes.”