U.S. Homebuilders No Longer Sure What To Do Even As Lumber Prices Crashed
NAHB Homebuilder Confidence crashed from 80 to 75 in August. That is a 13-month low (July 2020).
Under the hood, the gauge of future single family sales was unchanged at 81, but the measure of present single family sales plunged to 81 from 86 last month, and more notably, prospective buyers' traffic tumbled to 60 vs 65. Of the index’s three components, the index gauging current sales condition fell five points to 81 in August 2021. The index measuring traffic of prospective buyers fell five points to 60, while the gauge of sales expectations in the next six months held at 81. (Any number over 50 indicates that more builders view conditions as good than as poor.) The Midwest and the South posted decreases in July, reaching the lowest sentiment levels since last summer. Meanwhile, the Northeast and the West slightly rose.
According to the NAHB, rising construction costs, supply shortages, and high home prices have pushed builder confidence down from 13 months of steady highs. While the demographics and interest for home buying remain solid, higher costs and material access issues have resulted in lower levels of home building and even put a hold on some new-home sales.
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