U.S. New Home Sector Remains Bright

Ending a string of three successive months of record highs, U.S. builder confidence in the market for newly-built single-family homes fell four points to 86 in December, says the latest NAHB/Wells Fargo Housing Market Index (HMI). Despite the decline, this is still the second-highest reading in the history of the series after last month’s mark of 90. “Builder confidence fell back from historic levels in December, as housing remains a bright spot for a recovering economy,” says Robert Dietz, NAHB chief economist. “The issues that have limited housing supply in recent years, including land and material availability and a persistent skilled labour shortage, will continue to place upward pressure on construction costs. As the economy improves with the deployment of a COVID-19 vaccine, interest rates will increase in 2021, further challenging housing affordability in the face of strong demand for single-family homes.”