Photo: Robert Clark
Recent increases in tariffs on Canadian lumber have caused the confidence of US homebuilders to slip amid growing affordability concerns.
Rising material costs — lumber, in particular — are making it exceptionally difficult for builders to provide homes at competitive prices, according to a new report released today by the National Association of Homebuilders (NAHB).
“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,” NAHB Chief Economist Robert Dietz says in the digital release.
Homebuilder sentiment slipped two percentage points on the NAHB Housing Market Index (HMI) to a reading of 68 in June, with mounting material costs and the “sharp” increase in lumber costs the chief causes for the decline.
Record-high lumber prices have added nearly $9,000 to the price of a new single-family home since January 2017.
But NAHB went on to say that improved economic growth, continued job creation and solid housing demand should spur additional single-family construction in the months ahead.
The HMI is derived from a monthly survey conducted by NAHB that gauges homebuilder perceptions of current single-family homes sales and future expectations, as well as buyer foot traffic.
Any score over 50 indicates that builders view conditions as “good” as opposed to “poor.”
Each of the three components that comprise the HMI slipped one point in June.
While buyer traffic hovers on the line between “good” and “poor,” builders’ overall sentiment of the housing industry remains quite strong.
“Builders are optimistic about housing market conditions as consumer demand continues to grow,” NAHB Chairman Randy Noel says in the digital release.
Click here to read the entire release.