Homebuilder confidence slipped in July as supply shortages showed no signs of improving.
Data released Monday by the National Association of Home Builders showed confidence fell one point to 80, the lowest since August 2020. A score over 50 shows more builders view the conditions as good versus poor.
"Builders are contending with shortages of building materials, buildable lots and skilled labor as well as a challenging regulatory environment," said NAHB chief economist Robert Dietz. "This is putting upward pressure on home prices and sidelining many prospective home buyers even as demand remains strong in a low-inventory environment."
The cost of strand board, a common material used in homebuilding, has soared more than 500% this year amid a supply shortage caused by COVID-19 lockdowns. Rising lumber prices have added $36,000 to the price of building a new home, pricing some homebuyers out of the market.
The price of lumber traded at CME Group has plunged 67% from its May high, but most homebuilders have not been able to take advantage of lower prices as suppliers are still selling lumber that was purchased when prices were higher, NAHB CEO Jerry Howard told FOX Business last week.
The NAHB’s three major housing market indexes were mixed. The gauge of current conditions slipped one point to 86, while the component measuring traffic from prospective buyers declined six points to 65. Sales expectations over the next six months rose two points to 81.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The three-month moving average for builder sentiment fell four points to 75 in the Northeast. It also fell one point to 71 in the Midwest and two points to 87 in the West. The South was unchanged at 85.