The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) indicates that builder confidence in the market for newly built single-family homes declined 4-points to a reading of 86 in December. Bringing the three consecutive month streak of new records highs to an end. The NAHB did note that in spite of the decline, December is still the second-highest reading in the history of the series after last month’s 90. The NAHB is predicting that housing demand will remain strong entering 2021. However, they believe that the coming year will see housing affordability challenges as inventory remains low and construction costs are rising. The NAHB also foresees headwinds as a shortage of buildable land and material availability continues, as well as a persistent skilled labor shortage. The NAHB also believe that as the COVID-19 vaccine is distributed the economy will continue to improve and with it an increase in interest rates which will further challenge housing affordability.
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Builder Confidence Down from Record High, Still Strong