Homebuilders across the nation are still not seeing relief from recent supply chain problems that have slowed down construction, however high buyer demand seems to be compensating.

The National Association of Home Builders/Wells Fargo Housing Market Index showed that builders’ confidence in single-family home building markets rose to 80 points in October. It is down slightly from 85 in Oct 2020 and 90 from November 2017. Any increase in the number of positives is considered to be positive.

“Although demand and home sales remain strong, builders continue to grapple with ongoing supply chain disruptions and labor shortages that are delaying completion times and putting upward pressure on building material and home prices,” said NAHB Chairman Chuck Fowke, a homebuilder from Tampa, Florida, in a release.

The current sales situation rose 5 percentage points to 87, out of the three component indexes. In the following six months, sales forecasts rose 3 points at 84 while buyer traffic increased 4 points at 65.

Builders are now most concerned about affordability. They raise prices in order to cover rising labor, materials, and land costs.

According to U.S. Census data, August’s median sale price for a new home was 20% less than that of August 2020. While some of that is the mix of homes selling — more on the high end of the market — it also reflects builder increases.

Builders have had to slow down home sales because of construction obstacles. They are worried about not being able to ship houses at the normal rate.

New construction is becoming more popular as homebuyers look for homes that are affordable and plentiful.

Robert Dietz chief economist of the NAHB stated, “Building material prices increases and bottlenecks persist”

The Mortgage Bankers Association just published a forecast that predicts that the average 30-year fixed rate mortgage rate will reach 4% by 2022. This is up from 3% currently.

Looking at regionally, the builder sentiment index for the Midwest rose by 1 point to reach 69. It was 72 in the Northeast. At 80 and 83 respectively, the South as well as West were also unaffected.