Homebuilding sentiment has rebounded in October rising four points to 80, according to The National Association of Home Builders.

The current figure is still below the October 2020 figure of 85 and the record high of 90 which was recorded in November 2020. Anything above 50 is considered positive.

NAHB Chairman Chuck Fowke, a homebuilder from Tampa, says despite high demand, homebuilders are still struggling with supply chain disruptions and labor shortages which have delayed the completion of newly built homes.

All three index components increased with sales conditions rising five points to 87, sales expectations for the next six months rose three points to 84, and buyer traffic increased four points to 65.

"Builders are getting increasingly concerned about affordability hurdles ahead for most buyers," said NAHB Chief Economist Robert Dietz.

The median price of a newly built home sold in August rose 20% compared to August 2020, according to the U.S. Census. Homebuyers have been opting to buy a newly built house due to the fact previously owned homes have proven to be expensive and outside their budget.

Building sentiment rose one point in the Midwest to 69, whereas building sentiment was unchanged in the Northeast at 72, the South at 80, and the West at 83, respectively.

According to the Mortgage Bankers Association, a rate for a 30-year fixed mortgage will rise to 4% by the end of 2022, compared to the 3.18% buyers are finding now.