After 12 straight monthly declines, builder confidence in the market for newly built single-family homes rose four points in January to 35, signaling a possible rebound for home building in 2023, the National Association of Home Builders' Eye on Housing reports. In the coming quarters, single-family starts are expected to rise from cycle lows as slower mortgage rate hikes improve housing affordability and lead to a resurgence of buyer activity.
According to the most recent NAHB/Wells Fargo Housing Market Index (HMI), measures of current sales conditions, sales expectations, and buyer traffic all increased in January, though builders are still grappling with a housing deficit of 1.5 million units.
It is possible that the low point for builder sentiment in this cycle was registered in December, even as many builders continue to use a variety of incentives, including price reductions, to bolster sales. The rise in builder sentiment also means that cycle lows for permits and starts are likely near, and a rebound for home building could be underway later in 2023.
Related Stories
Builders
Home Builder Incentives and Price Reductions Are Finally Paying Off
Home building company KB Home reported a drop in cancellations at the start of 2023 after a major slowdown in buyer activity during the final quarter of 2022
Builders
Home Builders Remain Optimistic Despite Market Headwinds
Buyers are retreating as mortgage rates rise, but home builders are looking ahead to strong growth in the new-home market in 2023
Human Resources
It's Personal: Pilot Program Promotes Mental Health Awareness in Construction
The National Association of Home Builders partners with mental health advocate Dr. Sally Spencer-Thomas on a strategic plan to promote mental health and suicide prevention
