Builder sentiment remained unchanged at 46 in December; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to NAHB. It reached a record high of 90 in November 2020.
Regarding the three components of the homebuilder index, current sales conditions were unchanged at 48; buyer traffic fell one point to 31; and sales expectations in the next six months rose three points to 66.
Thirty-one percent of builders reported cutting prices in December, which is unchanged compared with November. The average price discount remained at 5% in December. Sixty percent of builders were using sales incentives other than price cuts to improve sales in December, which also is unchanged from November.
“While builders are expressing concerns that high interest rates, elevated construction costs and a lack of buildable lots continue to act as headwinds, they are also anticipating future regulatory relief in the aftermath of the election,” said NAHB Chairman Carl Harris. “This is reflected in the fact that future sales expectations have increased to a nearly three-year high.”
