The Atlanta Fed's latest poll of regional residential brokers and homebuilders shows an increase in the number of contacts reporting softening home sales and construction activity. The two charts below show indexes near or below zero.
This softening appears to be the result of normal seasonal factors, but even so, it seems a good time to revisit a question we posed one year earlier, where we ask builders to look ahead over the next 12 months and characterize risks to their outlook.
Interestingly, builder contacts indicated that access to development finance and lot availability continues to pose significant risks to their outlook. They also reported that land position and labor shortages have become more significant risks compared to one year ago (see the table).
In addition to highlighting the risks that have come into the forefront during the past year, it also seems worthwhile to point out that a few of the risks have fallen off a bit since we last posed this question. For instance, only one-third of respondents considered rising mortgage rates to be significant risk to their outlook in November 2014 compared to two-fifths of respondents in October 2013. And only one-fourth of respondents indicated that consumer confidence was a significant risk to their outlook in November 2014 compared to nearly two-fifths in October 2013.
To explore these results in more detail, or to view other results that were not discussed in this post, please visit our Construction and Real Estate Survey results web page.
Note: The latest poll results, which reflect activity in October 2014, are based on responses from 35 residential brokers and 24 homebuilders and were collected November 3–12. If you would like to participate in this poll, you may sign up here.
By Jessica Dill, senior economic research analyst in the Atlanta Fed's research department