Homebuilders’ Confidence Falls As They Wait Months For Cabinets, Garage Doors And Appliances

• Supply chain issues for homebuilders appear to be getting worse, and that is weighing on confidence in the industry. Builder confidence in the single-family, newly built housing market fell 1 point in February to 82 on the National Association of Home Builders/Wells Fargo Housing Market Index. That is the second straight month of declines, but anything above 50 is considered positive. 
• Production disruptions are so severe that many builders are waiting months to receive cabinets, garage doors, countertops and appliances. These delivery delays are raising construction costs and pricing prospective buyers out of the market. Surging lumber prices are also adding thousands of dollars to the cost of new homes. 
• Homebuyers are already contending with rising interest rates. The average rate on the popular 30-year fixed mortgage just crossed over 4%, well over a full percentage point higher than it was a year ago. Add higher rates to higher home prices, and some buyers are simply unable to afford it. This is why rental demand is currently so high. 
• Higher interest rates in 2022 will further reduce housing affordability even as demand remains solid due to a lack of resale inventory.

(Source: CNBC News)