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Builder confidence for the newly built, single-family home market reached its highest point in 20 years this month. Rising lumber prices may put a damper on the positive sentiment though, says CNBC. According to the NAHB/Wells Fargo Housing Market Index, builder confidence hit 78 in August, a six-point jump from the previous index. New single-family homes have been in high demand, but lumber prices have doubled since mid-April. Several mills closed down at the beginning of the pandemic, reopening to an unexpected demand. NAHB’s chairman says these cost increases could “dampen momentum” in the housing market this Fall.
Of the index’s three components, current sales conditions rose six points to 84. Sales expectations in the next six months increased three points to 78, and buyer traffic jumped eight points to 65, its highest level in the history of the survey.
Builders are clearly benefiting from the severe shortage of existing homes for sale. There were too few homes to meet demand even before the pandemic struck, and now fewer homeowners are willing to list their homes for sale.
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