Confidence in the single-family home construction market has fallen to its lowest point among builders since the spring of 2020 and the Covid-19 outbreak, reflecting a general flattening of the economy, according to a new industry study.
On an index scale, the National Association of Home Builders is reporting that builder confidence level is now down to 46. That index, compiled by NAHB and the Wells Fargo bank, starts at zero for very poor to 100 for excellent.
The 46 reading is a drastic comedown from attitudes recorded in January of this year when the index stood at 83 but is still higher than where things stood during the immediate months of the spring 2020 pandemic, when it dropped to 30.
Factoring out the extraordinary and even surreal conditions of the Covid-19 outbreak, the latest index rating has not been this low since the spring of 2014.
In a statement, Jerry Konter, NAHB chairman, remarked that “buyer traffic is weak in many markets as more consumers remain on the sidelines due to high mortgage rates and home prices that are putting a new home purchase out of reach for many households.”
Konter noted that in response to current conditions, some 24% of home builders are reporting that they have reduced prices this month, up from 19% in August.
Regionally, builders in the South were the most bullish in the survey, producing a 52 index result, down from 63 the previous month.
The Northeast dropped from 56 to 48, while the Midwest decreased from 49 to and 42. The West, which has seen the nation’s highest home prices, saw a precipitous decline from 51 in August to 34 currently.
By Garry Boulard
