Consumer demand for newly-built single-family homes remains strong and the economy is growing but builders have a key concern about the market.
And that’s the rising cost of lumber amid the ongoing trade dispute with Canada.
The National Association of Home Builders / Wells Fargo Housing Market Index declined 2 points this month to a reading of 68 with all three components (current sales conditions, expectations in 6 months, and buyer traffic) declining.
“Builders are optimistic about housing market conditions as consumer demand continues to grow,” said NAHB Chairman Randy Noel. “However, builders are increasingly concerned that tariffs placed on Canadian lumber and other imported products are hurting housing affordability. Record-high lumber prices have added nearly $9,000 to the price of a new single-family home since January 2017.”
Regional variations continue
The three-month moving averages for regional HMI scores, shows the Northeast rose two points to 57 while the West and Midwest remained unchanged at 76 and 65, respectively. The South fell one point to 71.
“Improved economic growth, continued job creation and solid housing demand should spur additional single-family construction in the months ahead,” said NAHB Chief Economist Robert Dietz. “However, builders do need access to lumber and other construction materials at reasonable costs in order to provide homes at competitive price points, particularly for the entry-level market where inventory is most needed.”
More market update: