Builders Remain Conservatively Optimistic About 2023 Despite the Industry's 'Complicated Landscape'

By Dale Oviatt posted 01-23-2023 12:00 AM

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As high interest rates suffocate sales and operating costs stifle construction, single-family home builders enter the new year with confidence at historic lows, expenses at historic highs, and an abysmal national housing shortage expected to only deepen.

Builders Remain Conservatively Optimistic About 2023 Despite the Industry's 'Complicated Landscape'

November 2022 may well go down as a new low-water mark for the U.S. home building economy. The average rate for a 30-year, fixed-rate mortgage peaked at 7.08%, driven largely by four successive 75-basis-point (bp) interest rate hikes by the Federal Reserve. Builder confidence in the market for newly built single-family homes as measured by the NAHB/Wells Fargo Housing Market Index declined for an 11th straight month, and research from Realtor.com indicated that the country was facing a housing shortage of some 5.24 million homes, an increase of more than 36% (and approximately 1.4 million additional homes) from just three years prior.

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