Builder sentiment dropped one point to 80 in July amid materials shortages and high prices, according to cnbc.com. It reached a record high of 90 in November 2020.
Any reading above 50 indicates a positive market; the National Association of Home Builders/Wells Fargo Housing Market Index had fallen to 30 in April 2020.
Of the homebuilder index’s three components, current sales conditions fell one point to 86; sales expectations in the next six months rose two points to 81; and buyer traffic declined six points to 65.
“Builders continue to grapple with elevated building material prices and supply shortages, particularly the price of oriented strand board, which has skyrocketed more than 500% above its January 2020 level,” said NAHB Chairman Chuck Fowke, a homebuilder from Tampa, Fla.
Although lumber prices have fallen in the lumber futures market, savings have not trickled down to builders, remodelers or consumers. Supply chain issues and low inventory are keeping retail prices elevated.
“Builders are contending with shortages of building materials, buildable lots and skilled labor, as well as a challenging regulatory environment,” said Robert Dietz, chief economist for NAHB. “This is putting upward pressure on home prices and sidelining many prospective home buyers even as demand remains strong in a low-inventory environment.”
