Homebuilders are growing less certain after the recent hurricanes in Florida and Texas rose doubts surrounding the labor shortage and cost of materials, according to the National Association of Home Builders and Wells Fargo Housing Market Index.
Builder confidence in the market for newly built single-family homes fell three points in September to 64, down from a downwardly revised 67 in August, the index showed.
“The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,” NAHB Chairman Granger MacDonald said. “Once the rebuilding process is underway, I expect builder confidence will return to the high levels we saw this spring.”
Derived from a monthly survey that NAHB has been conducting for 30 years, the index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair or poor.
The survey also asks builders to rate traffic of prospective buyers as high to very high, average or low to very low. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates most homebuilders view conditions as good rather than poor.
All three components of the index saw decreases in September, but remain at healthy levels. The component which measures current sales conditions decreased four points to 70 while the index which shows sales expectations over the next six months fell four points to 74. The components which looks at buyer traffic slipped just one point to 47.
“Despite this month's drop, builder confidence is still on very firm ground,” NAHB Chief Economist Robert Dietz said. “With ongoing job creation, economic growth and rising consumer confidence, we should see the housing market continue to recover at a gradual, steady pace throughout the rest of the year.”
But homebuilders weren’t the only ones to see a drop in confidence as the hurricanes swept across the nation. The most recent survey from the University of Michigan showed consumer confidence also dropped due to the storms.