Builder Confidence Falls Two Points in June
Washington, DC, June 18, 2018-Builder confidence in the market for newly-built single-family homes fell two points to 68 in June on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
The decline was due in large part to sharply elevated lumber prices, although sentiment remains on solid footing.
“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.”
“Improved economic growth, continued job creation and solid housing demand should spur additional single-family construction in the months ahead,” said NAHB chief economist Robert Dietz. “However, builders do need access to lumber and other construction materials at reasonable costs in order to provide homes at competitive price points, particularly for the entry-level market where inventory is most needed.”
All three HMI indexes inched down a single point in June. The index measuring current sales conditions fell to 75, the component gauging expectations in the next six months dropped to 76, and the metric charting buyer traffic edged down to 50.
Looking at the three-month moving averages for regional HMI scores, the Northeast rose two points to 57 while the West and Midwest remained unchanged at 76 and 65, respectively. The South fell one point to 71.