Escalating costs took a toll on builder confidence
this month. The National Association of Home Builders (NAHB) said its Housing
Market Index dipped two points from its February level. At 82 it is down 8
points from the all-time high it established last November.

NAHB’s chief
economist Robert Dietz said, while there is still a high volume of buyer
traffic and strong consumer demand,
rising lumber prices, especially for softwood lumber and other material costs
as
well as delivery delays, have pushed builder confidence lower. Lumber prices
are up by about 200 percent since April, driven by shortages and high demand. This
his added about $24,000 to the price of a new home at a time when interest
rates are also rising.

 

 

Derived from a monthly survey that NAHB has been conducting for 35 years,
the HMI, which is cosponsored by Wells Fargo, asks builders for their perceptions
of current single-family home sales and as well as their expectations for sales
over the next six months as “good,” “fair” or “poor.” They are also asked to rate
buyer traffic as “high to very high,” “average” or “low to very low.” Scores
for each component are then used to calculate a seasonally adjusted index where
any number over 50 indicates that more builders view conditions as good than
poor.

The HMI index gauging current sales conditions fell three points to 87 while
the component measuring sales expectations in the next six months increased
three points to 83.
The gauge charting traffic of prospective buyers was
unchanged from February at 72.

Looking at the three-month moving averages for regional HMI scores, the
Northeast rose two points to 80, the Midwest fell one point to 80, the South
dropped two points to 82 and the West posted a three-point loss to 90.

By Jann Swanson , dated 2021-03-16 11:38:56

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Courtesy of Mortgage News Daily

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