Cooling Trend for Housing Continues
NAHB Chief Economist Robert Dietz recently provided this housing industry overview in the bi-weekly e-newsletter Eye on the Economy.
Higher costs, longer construction times and elevated home prices have persistently frustrated buyers, renters and builders. However, recent reports saw an uptick in various housing data.
The NAHB/Wells Fargo Housing Market Index measure of single-family builder sentiment rose four points in October to a level of 80 — its highest reading since July. And new home sales rose 14% to an 800,000 annualized rate in September, although median prices are up almost 19% from a year ago. Existing home sales surged to an eight-month high, while inventory remains at a very low 2.4-month supply.
Housing starts ran counter to these upticks, with overall starts down slightly because of a 5% decline for multifamily starts of five-plus units. Single-family starts were flat at a 1.08 million annualized rate. Although demand remains strong, higher prices have cooled prospective buyers’ intent to purchase a home.
Meanwhile, higher home values have lifted home equity and household wealth, which is largely supporting the home improvement sector. Remodeler confidence is near all-time highs, as reflected in the NAHB/Royal Building Products Remodeling Market Index, which remained at a level of 87 for the third quarter.
Supply-chain issues continue to plague the economy, and NAHB is forecasting these challenges will persist through 2022. Residential construction material prices are up 11% thus far in 2021 and 14% higher than a year ago. Lumber prices — though down 62% from their peak in May — are trending upward yet again, and builders are reporting major delays and higher costs of a broad range of other building products.
Further compounding these issues, lot supplies are as tight as they have ever been, according to a recent NAHB survey that stretches back to 1997.
To subscribe for free to Eye on the Economy, please visit nahb.org.
Latest from NAHBNow
Oct 29, 2025
Do Consumers Want Two-Story Foyers?Nearly a quarter of new homes were built with a two-story foyer in 2024 — a number that has been trending downward over the past eight years. Though the national decline continued, regional patterns were mixed. See where this feature is hot — and where it's not.
Oct 29, 2025
How to Market to and Design for the Aging-in-Place ClientNAHB will host three webinars (open to members and non-members) in November to teach the technical, business management, and customer service skills necessary to complete modifications for aging-in-place.
Latest Economic News
Oct 29, 2025
The Fed Cuts amid Partly Cloudy ConditionsWith the government shutdown limiting the quantity of economic data available to markets and policymakers, the central bank’s Federal Open Market Committee (FOMC) enacted a widely anticipated 25 basis point cut for the short-term federal funds rate.
Oct 28, 2025
Home Price Growth SlowsHome prices in August grew at the lowest annual rate in over two years, according to the recent release of the S&P Cotality Case-Shiller Home Price Index (seasonally adjusted – SA).
Oct 27, 2025
Two-Story Foyer Trend Stabilizes in 2024In 2024, nearly a quarter of new homes were built with a two-story foyer, virtually unchanged from 2023, according to data obtained from the Census Bureau’s Survey of Construction (SOC) and tabulated by NAHB.