High costs and scarcity of materials leading to decrease in buyer traffic of homes, report says

As cost of lumber and materials sour to new levels, homebuilder confidence has dropped to a 13-month low, according to a report by Fox Business. 

The National Association of Homebuilder’s/Wells Fargo Housing Market index has dropped by 75 points in the month of August, the lowest since July 2020, the report states. The index can range from 0 to 100, with print over 50 pointing to a positive sentiment. An index above 80 indicating a strong demand. 

“While the demographics and interest for home buying remain solid, higher costs and material access issues have resulted in lower levels of home building and even put a hold on some new home sales,” said chief economist at NAHB Robert Dietz.

Fox Business further claims that two of the three major indexes within the report showed declines. Sales conditions dropped five points to 81, buyer traffic also fell five points to 60, and sales expectations for the six upcoming months were reported at 81. 

Moving average for builder sentiment also dropped in all regions. The moving average in the Northeast dipped to 74, dipped two points to 68 in the Midwest, three points to 82 in the South and two points to 85 in the West.  

“While these supply-side limitations are holding back the market, our expectation is that production bottlenecks should ease over the coming months and the market should return to more normal conditions,” Dietz claimed. 



Leave a Reply