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In the last few months, the lumber prices have fallen sharply, but that has not been enough to ease the homebuilders.
In August on the National Association of Home Builders (NAHB) Wells Fargo Housing Market Index (HMI) showed the sentiment among single-family homebuilders dropped 5 points to 75.
Even if anything above 50 is considered positive, but since July 2020 that is the lowest reading. August 2020 the index was at 78.
The current sales conditions fell to 81 and in traffic of prospective buyers, a drop of 5 points to 60 was seen. For the next six months, the sales expectations remain the same at 81.
Builders are facing rising materials costs and skilled labor. Leading to the price of newly built homes going ever higher and affecting demand.
The 56% of new and existing homes sold between 3 months were affordable to families having $79,900 U.S. median income.
That is a drop from the 63.1% of homes sold in the first quarter of 2021 and the lowest affordability level since the first quarter of 2012.
NAHB Chairman Chuck Fowke, A homebuilder from Tampa, Florida said that the high construction costs are frightening the home buyers he added that the policymakers should come out with a long-term solution to these supply-chain issues.
On Monday the price of lumber fell 4.91% to sit at $470.90, it is down 72.48% from its peak of $1,711.20 on May 10.
Even as lumber prices are improving, the price and availability of other building materials like flooring, drywall, appliances, and windows pose a challenge said the NAHB’s chief economist, Robert Dietz.
According to NAHB analysis of producer price index data, in the first six months of 2021, the aggregate residential construction material pricing rose 13%.
Reference Source: CNBC
