Builders are blaming lawmakers in Washington, D.C. for the mounting challenges facing the new-home sector.
“Policy and economic uncertainty is undermining consumer confidence,” says NAHB Chief Economist David Crowe.
Despite the challenges, builder confidence held steady in November, with slightly more builders viewing market conditions as “good” rather than “poor,” according to the National Association of Home Builders/Wells Fargo Housing Market Index
“The fact that builder confidence remains above 50 is an encouraging sign, considering the unresolved debt and federal budget issues cause builders and consumers to remain on the sideline,” Crowe said.
The NAHB/Wells Fargo index gauges builders’ perception of current single-family home sales, sales expectations for the next six months, and buyer traffic. A reading above 50 indicates that there are more builders who view conditions as good rather than poor.
The index showed a reading of 58 from builders on current sales conditions in November, the same as the previous month. The measure for future sales, however, dropped one point in November and the measure for buyer traffic dropped one point.
“Given the current interest rate and pricing environment, consumers continue to show interest in purchasing new homes, but are holding back because Congress keeps pushing critical decisions on budget, tax and government spending down the road,” says NAHB Chairman Rick Judson. “Meanwhile, builders continue to face challenges related to rising construction coast and low appraisals.”