By Maria Martinez


Home-builder confidence in the U.S. decreased in January due to rising material costs and a resurgence of the coronavirus across much of the nation, according to a measure from the National Association of Home Builders. Here are the report's main takeaways:

--The association's housing market index, which gauges the single-family housing market, fell to 83 in January, down three points from the December level of 86. A number above 50 indicates that more builders view conditions as good than poor.

--The reading is below economists' forecasts from The Wall Street Journal poll, which estimated the index to decline to 85.

--Despite the drop, builder sentiment remains at a strong level, the National Association of Home Builders said.

--"While housing continues to help lead the economy forward, limited inventory is constraining more robust growth," NAHB Chief Economist Robert Dietz said. A shortage of buildable lots is making it difficult to meet strong demand and rising material prices are far outpacing increases in home prices, which in turn is harming housing affordability, he said.

--"Builders are grappling with supply-side constraints related to lumber and other material costs, a lack of affordable lots and labor shortages that delay delivery times and put upward pressure on home prices," NAHB Chairman Chuck Fowke said.

--All the HMI indexes decreased in January compared with the previous month. The index gauging current sales conditions dropped two points to 90, the component measuring sales expectations in the next six months fell two points to 83, and the measure charting traffic of prospective buyers declined five points to 68.


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(END) Dow Jones Newswires

January 20, 2021 10:14 ET (15:14 GMT)

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