Rising Costs Hammer Home Builder Confidence

By Qiong (June) Zhang44 Comments


Confidence among U.S. home builders fell in April, as concerns over lack of developed land lots and rising costs for building materials weighed heavily. A monthly industry index fell two points, the third consecutive month of declining builder sentiment in single family homes, after solid gains throughout much of 2012.

“Supply chains for building materials, developed lots and skilled workers will take some time to re-establish themselves following the recession, and in the meantime builders are feeling squeezed by higher costs and limited availability issues,” explained National Association of Home Builders Chief Economist David Crowe.

The NAHB’s monthly confidence index now stands at 42, up from 24 in April of 2012.  Sales expectations over the next six months posted a three point gain to its highest level since February of 2007.

Regionally, home builder confidence was unchanged in the Northeast and fell in the other three regions with the South seeing the deepest decline. Builders in the West have been particularly hard hit by lack of land and labor, as a heavy investor presence in the distressed market has pushed other buyers to new construction, creating unexpected high demand.


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