Builder confidence increased for the third month in a row in November, as demand for housing remained strong even in the face of serious supply chain challenges, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released on Tuesday.
The HMI increased three points in November, from 80 to 83, beating expectations. Back in September, the HMI was 76.
A report from the NAHB noted that continued low inventory coupled with intense buyer demand have sustained construction of single-family homes. That said, building materials, lot and labor shortages have constrained progress.
“Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions,” the NAHB’s report noted. “Policymakers need to focus on resolving these issues to help builders produce more housing to meet strong market demand.”
The HMI that gauges builder perceptions of current sales conditions increased by three points to 89 while the HMI measuring builder sentiment for traffic of potential buyers also rose by three points to 68. The HMI for builders’ sales expectations for the next six months stayed the same at 84.
By region, the Midwest and South saw the strongest gains, with both HMIs increasing by four points to 72 and 84, respectively. The West HMI, meanwhile, rose by one point to 84 and the Northeast HMI declined two points to 70.