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Builder confidence hampered by growing economic concerns

Posted on Monday, March 17, 2014 at 1:24:35 PM

Economic conditions over the last several months have caused homebuilder confidence to barely change on a month-to-month basis, according to the National Association of Homebuilders.

It appears that any positive changes were hampered because of several concerns expressed regarding the economy, the NAHB noted. Winter weather may also still be a factor in residential real estate, limiting the amount of potential sales. The organization's Housing Market Index only rose one point from February to March.

"A number of factors are raising builder concerns over meeting demand for the spring buying season," said NAHB chief economist David Crowe. "These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale."

These changes could impact buyers interested in residential financing. A lack of new homes being built might lead to an inventory shortage down the line.

In addition, Ian Sheperdson, chief economist at Pantheon Macroeconomics, told The Wall Street Journal that it is still unclear just how impactful winter weather has been on homebuilder confidence, since new home affordability may have also played a role. 

Thankfully for builders and buyers, the spring season is right around the corner. Warmer temperature tend to bring along increased confidence in the U.S. housing market as a whole.