NAHB Builder Confidence registered a warning flag last month after it fell sharply to a 13-month low, yet it managed to rebound by one point in September. Homebuilder’s optimism has waned as they face rising materials costs, labor shortages, and a slowdown in the Traffic of Prospective Buyers (bottom graph). While the slight bounce in this leading housing indicator is a positive, this warning flag will remain in place until it makes a clear break out of its current downtrend.
