Photo: Roy Luck/Flickr
Hurricanes Harvey and Irma devastated properties in Texas and Florida and, in the aftermath, homebuilders have expressed concerns about securing both building materials and skilled labor.
Single-family homebuilder confidence dropped three points on the Housing Market Index (HMI) to a level of 64, down from a revised reading of 67 in August, according to a report released yesterday by the National Association of Home Builders (NAHB).
The recent hurricanes was cited as the principal cause for the three point drop over the last month. However, the dip in confidence isn’t expected to last long.
“Once the rebuilding process is underway, I expect builder confidence will return to the high levels we saw this spring,” NAHB Chairman Granger MacDonald says in the report. MacDonald is a home builder and developer based in Texas.
Another factor to consider is that the effect of natural disasters tend to be more localized.
“Events like hurricanes tend to spill over into national areas of concern like material and lot pricing, but the effect is more localized in scope,” NAHB Chief Economist Robert Dietz tells BuzzBuzzNews.
Also, the scaricity of labor has been an on-going concern for homebuilders over the last three to four years.
“Labor was anticipated to be the top concern of 2017, even before the election. Disasters only shine a spotlight on the pre-existing problem,” says Dietz.
Derived from a monthly survey conducted by NAHB, the HMI gauges builder perception of sales of single-family homes now and six months in the future. It also measures homebuyer foot traffic by asking builders to rate overall traffic as “high to very high,” “average” or “low to very low.”
Respondents grade each component as either “good,” “fair” or “poor” which is then correlated to a score on the index. Any score over 50 indicates that builders view conditions more “good” than “poor.”
Each of the individual components that make up the HMI recorded monthly declines in September, but are still at “healthy levels.”
The current sales conditions component dropped by four points to 70 in September from the previous month, while the future sales component declined four points to a reading of 74.
Meantime, over the last month, homebuyer foot traffic slipped one point to a reading of 47.
Click here to read the entire report.