Builders Cite Higher Lumber Costs in Confidence Drop
The rising cost of lumber was blamed for the two-point drop in builder confidence in the June edition of the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This month’s HMI holds a rating level of 68.
All three HMI indexes dipped by one point in the new HMI report: The index measuring current sales conditions fell to 75, the component gauging expectations in the next six months slid to 76, and the metric charting buyer traffic edged down to 50. Among the three-month moving averages for regional HMI scores, the Northeast rose two points to 57, the South fell one point to 71 and the West and Midwest remained unchanged at 76 and 65, respectively.
“Builders are optimistic about housing market conditions as consumer demand continues to grow,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, builders are increasingly concerned that tariffs placed on Canadian lumber and other imported products are hurting housing affordability. Record-high lumber prices have added nearly $9,000 to the price of a new single-family home since January 2017.”