Over the past several years, the number of people interested in purchasing a home hasn’t waned. However, while buyer demand remains high, a survey conducted by the National Association of Home Builders and Wells Fargo Housing Market Index says that home builders continue to grow discouraged about the housing market.
For the first time since September 2021, homebuilder confidence has dropped below the 80-point mark. In March 2022, the index dropped to 79, which was two points lower than the previous month. It also marked the fourth straight month of declining confidence.
Ongoing lumber and building material supply issues and labor shortages as well as increasing construction costs are contributing to this downturn. Supply chain issues have caused difficulty with builders’ access to lumber and other building materials. Increasing construction costs are up 20% over the past 12 months, adding to the growing concern from builders.
Another issue involves rising mortgage rates. As of March 2022, the average rate for a 30-year fixed-rate mortgage was already a full percentage point higher than it was just one year prior. Expected higher interest rates might price prospective buyers out of the market as well, which deters builders from constructing homes that might sit vacant longer.
Material delays and sourcing workers continue to make significant challenges for builders. There’s also some worry that the housing market might face further difficulty during the later part of 2022, but it’s still too early to determine what kind of overall effect it will have.
Despite the worry about finding builders to construct homes, buyers can still find affordable houses for sale. To get started on your search, contact a real estate professional today.
Sources: Housingwire.com, CNBC.com, Marketwatch.com
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.
