The National Association of Home Builders (NAHB) said builder confidence in the new home sales market increased in November for the third consecutive month despite the many challenges builders are facing. The NAHB/Wells Fargo Housing Market Index (HMI) rose 3 points from its October level to 83.

NAHB chief economist Robert Dietz said low inventories and strong buyer demand are encouraging the association's new home builder members even as the supply-side challenges persist. "In addition to well publicized concerns over building materials and the national supply chain, labor and building lot access are key constraints for housing supply. Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions. Policymakers need to focus on resolving these issues to help builders produce more housing to meet strong market demand," he said.

Derived from a monthly survey that NAHB has been conducting for 35 years, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." Builders are also asked to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index gauging current sales conditions rose 3 points to 89 and the gauge charting traffic of prospective buyers also posted a 3-point gain to 68. The component measuring sales expectations in the next six months held steady at 84.

Looking at the three-month moving averages for regional HMI scores, the Midwest and the South each increased 4 points to 72 and 84 and the West rose 1 point to 84. The index in the Northeast fell 2 points to 70.