Homebuilder Confidence Soars Despite Interest Rate Hurdles

Limited inventory of existing homes due to sub-5% mortgage interest rates has led to an increased demand for new home construction, with builder confidence rising for the fifth straight month. Sales of newly built single-family homes rose nearly 10% in March, and 33% of homes listed for sale were new homes in various stages of construction. However, builders continue to face challenges in meeting the growing demand for new construction, including shortages of building materials and tightening credit conditions for residential real estate development and construction brought on by the actions of the Federal Reserve to raise interest rates.