Homebuilder confidence ticked off 13-month lows in September as some materials prices fell and housing demand remained strong.
The National Association of Home Builders/Wells Fargo Housing Market Index last month rose one point to 76, climbing off the lowest reading since July 2020. It marked the first increase in four months. Analysts surveyed by Refinitiv were expecting sentiment to slip to 74.
The index can range between 0 and 100 with any print over 50 indicating positive sentiment. Any reading above 80 signals strong demand.
"The September data show stability as some building material cost challenges ease, particularly for softwood lumber," said NAHB Chairman Chuck Fowke. "However, delivery times remain extended and the chronic construction labor shortage is expected to persist as the overall labor market recovers."
Builders have since the reopening of the economy struggled with supply chain disruptions that have resulted in materials shortages and skyrocketing costs amid a period of strong demand for building projects.
Two of the three major indexes within the report gained.
Current sales conditions rose one point to 82 while the component measuring prospective buyer traffic jumped two points to 62. Sales expectations for the next six months were unchanged at 81.
The three-month moving average for builder sentiment fell two points in the Northeast, South and West regions. The gauge was unchanged in the Midwest.
Also on Monday, D.R. Horton Inc., the largest U.S. homebuilder by market capitalization, warned that it expects to close on fewer homes in the current quarter and fiscal year than previously expected due to "significant disruptions in the supply chain, including shortages and delivery delays in certain building materials along with tightness in the labor market."
|DHI||D.R. HORTON, INC.||88.57||-0.02||-0.02%|
The Arlington, Texas-based homebuilder expects to deliver 21,300 to 21,700 homes compared to the previous range of 23,000 to 24,500 homes. As a result, D.R. Horton says fourth-quarter revenue will be between $7.7 billion and $7.9 billion compared to the prior range of $7.9 billion to $8.4 billion.
The company also lowered its full-year delivery and sales forecasts.