When there aren’t enough homes for sale, prices increase. To ease the upward pressure on prices, more homes are needed. That’s why the new home market is such an important piece of the affordability puzzle. When builders are confident, more homes are built, the market balances, and prices moderate. Because of this, the National Association of Home Builders surveys builders each month to gauge their confidence. According to the most recent survey, builders are optimistic but increasingly concerned about supply-side issues. “Production disruptions are so severe that many builders are waiting months to receive cabinets, garage doors, countertops, and appliances,” NAHB chairman, Jerry Konter, says. “These delivery delays are raising construction costs and pricing prospective buyers out of the market.” It’s true. Residential construction costs are up 21 percent from where they were last year at the same time. Still, the survey – which is scored on a scale where any number above 50 indicates more builders view conditions as good than poor – remains above 80, falling just one point in February. (source)
