Homebuilder sentiment falls to lowest level in over a year as buyers face sticker shock
KEY POINTS
Sentiment among single-family homebuilders dropped 5 points to 75 in August on the National Association of Home Builders/Wells Fargo Housing Market Index.
Sales expectations in the next six months were unchanged at 81.
Lumber is down 72.48% from its intraday peak of $1,711.20 on May 10.
Article Courtesy | CNBC | Diana Olick
The price of lumber has fallen sharply in the last few months, but apparently that has not been enough to take the pressure off homebuilders.
Sentiment among single-family homebuilders dropped 5 points to 75 in August on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
Anything above 50 is considered positive, but that is the lowest reading since July 2020. The index stood at 78 last August. Of the index’s three components, current sales conditions fell 5 points to 81 and traffic of prospective buyers also fell 5 points to 60. Sales expectations in the next six months were unchanged at 81.
Builders are contending with continued rising costs for materials as well as for skilled labor. That is pushing the price of newly built homes ever higher and clearly affecting demand.
More than 56% of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $79,900. This is down sharply from the 63.1% of homes sold in the first quarter of 2021 and the lowest affordability level since the beginning of the NAHB’s revised series in the first quarter of 2012.
