Confidence among builders steadied in September, following a three-month decline, the National Association of Homebuilders reported Monday.
The NAHB/Wells Fargo Housing Index edged up to 76 from 75 in August, but is still off its high of 90 reached last November.
Housing has cooled from its red-hot pace during the coronavirus pandemic, when buyers exited cities in favor of the suburbs and consumers who were stuck working remotely at home sought out larger accommodations. But record prices and a shortage of housing inventory and the market cooled somewhat in recent months.
Since then, prices of lumber and other critical materials have fallen sharply from pandemic spikes and more sellers have put homes on the market, improving the supply and demand balance.
“The September data show stability as some building material cost challenges ease, particularly for softwood lumber,” the builder’s group wrote in a blog post Monday. “However, delivery times remain extended and the chronic construction labor shortage is expected to persist as the overall labor market recovers.”
The organization said that housing growth continues in the South and the West, particularly the Mountain West. Exurban markets have seen the most growth, while inner suburbs are now experiencing an increase in demand, especially for townhouses.
This week will see a number of reports on the housing industry, including housing starts and building permits on Tuesday and new home sales on Friday.