After climbing to the highest level in a decade, home builder confidence deteriorated this month thanks to land and labor shortages.
November 2015’s National Association of Home Builders/Wells Fargo Housing Market Index was reported at a level of 62.
An index that is above 50 indicates that more U.S. home builders view current conditions as good than those who view them as poor.
The index retreated from an upwardly revised 65 in October — the highest level in at least 10 years.
But a significant gain was made compared to November 2014, when the index landed at 58.
“Even with this month’s drop, builder confidence has remained in the 60s for six straight months — a sign that the single-family housing market is making long-term headway,” NAHB Chairman Tom Woods stated in the announcement. “However, our members continue to voice concerns about the availability of lots and labor.”
NAHB Chief Economist David Crowe noted in the report that the pullback from an unusually high index the previous month “is more in line with the consistent, modest growth that we have seen throughout the year.”
The index is based on a survey that asks builders to rate current single-family home sales, sales expectations for the next six months and traffic of prospective buyers.
Although there was a slight improvement in buyer traffic — current sales and expected sales deteriorated.
Based on a three-month moving average, the main index was up in the West and the Northeast and unchanged in the Midwest and the South.
