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Home Builder Confidence Rises in the Final Month of 2021

National Builders

Home Builder Confidence Rises in the Final Month of 2021

Despite high material costs and an ongoing labor shortage, national builders are ending the year on a high

December 16, 2021
Builder with new construction
Image: Stock.adobe.com

Strong housing demand after a year of project delays and backlogs has home builder sentiment on the rise in the final month of 2021, according to CNBC. The one point December increase on the National Association of Home Builders/Wells Fargo Housing Market Index marks the fourth consecutive month of rising builder confidence and ties with February for the highest level of the year.

Builders are benefiting from a limited supply of existing homes for sale, and many are seeing high demand from investors as the build-for-rent sector gradually gains steam. Sales conditions rose one point to 90 in December, and buyer traffic also increased one point to 70, signaling high demand for home builders in 2022. 

Builder sentiment in the single-family housing market rose one point to 84 in December, on the National Association of Home Builders/Wells Fargo Housing Market Index, or HMI. That is the fourth consecutive increase and ties with February for the highest level of the year. Anything above 50 is considered positive sentiment.

The increase comes despite concerns over inflation, supply-chain disruptions and an ongoing labor shortage. Prices for wallboard, steel, aluminum and plastic construction products rose sharply in November, according to the producer price index.

“While demand remains strong, finding workers, predicting pricing and dealing with material delays” remain challenging, said NAHB Chairman Chuck Fowke, a homebuilder from Tampa, Florida.

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