The economy is steadily rebounding due to coronavirus vaccines’ rollout, but the effects of Covid-19 mitigation strategies have caused supply-chain disruptions. Delay in completion times, shipping gridlock, trucker shortage, labor inadequacy, etc., are having a tremendous impact on builders. However, Confidence among single-family builders observed the largest monthly increase since last November as the Homebuilder sentiment index rose to 80 in October.
US Homebuilder sentiment has jumped 4 points, though it is still down from 85 in October 2020. Anything above 50 indicates a favorable condition. The current sales index rose 5 points to 87 on the National Association of Home Builders/Wells Fargo Housing Market Index. Other HMI components also recovered, with sales expectations increasing 3 points to 84 and prospective buyers’ index advancing from 61 to 65.
For two consecutive months, the customer traffic has improved with high buyer demand making up for the supply-chain bottlenecks. Nevertheless, builders are concerned for buyers as the return of demand post-pandemic has urged inflation which is bound to influence house affordability. Americans have been battling the supply-chain crisis amidst skyrocketing costs.
The three-month moving averages in the Northeast, South, and West remained unchanged while the Midwest index rose 1 point to 69 regionally. Industry experts predict that the global supply-chain delays will last another six months. President Biden recently announced that the Port of Los Angeles would begin 24/7 operations to tackle the congestion.