After setting three successive record highs, most
recently a 90 level in November, the pandemic and rising construction costs are
taking a toll on the Housing Market Index (HMI). The National Association of
Home Builders (NAHB) said the index, which it sponsors with Wells Fargo, fell
for the second straight month. A 3-point drop in the index, which measures
builder confidence in the new home market, follows a 4-point decline in
December. The January level now stands at 83. "Despite robust housing demand and low mortgage rates,
buyers are facing a dearth of new homes on the market, which is exacerbating
affordability problems," said NAHB Chairman Chuck Fowke. "Builders are
grappling with supply-side constraints related to lumber and other material
costs, a lack of affordable lots and labor shortages that delay delivery times
and put upward pressure on home prices. They are also concerned about a
changing regulatory environment."