gone up by $36,000<\/a> due to the ongoing lumber shortage.\u00a0<\/span><\/p>\nThe price of lumber has since hit an all-time high of $1,733.50 per 1,000 board feet, recorded on May 10th, but futures prices for July indicate a 31 percent price drop to $1,264 per 1,000 board feet. However, this lower-priced lumber isn\u2019t expected to be delivered to construction sites until August, potentially causing further delays for the industry.<\/p>\n
Single-family building permits, an indicator of future housing starts, dropped 3.8 percent from April to May to a rate of 1.15 million annualized units. Duncan suggests that this perceived weakness could just be \u201cnoise\u201d as single-family permits have outpaced housing starts in three out of the last four months, April included.<\/p>\n
He predicts a \u201cpartial rebound\u201d for single-family permits in next month\u2019s report due to sustained buyer demand and low inventory in the resale market. Total building permits rose 0.3 percent month-over-month to 1.76 million annualized units, while authorizations for multi-family projects improved by 9.6 percent to a rate of 559,000 units.<\/p>\n
\u201cThis report may be the strongest evidence yet that supply constraints, namely lumber and material prices, labor scarcity, and a lack of buildable lots, are weighing meaningfully on homebuilders\u2019 ability to keep up with housing demand,\u201d said Duncan.<\/p>\n
However, with lumber prices expected to continue falling, there is hope in sight for both builders and new home purchasers. April\u2019s NAHB\/Wells Fargo Housing Market Index pegged builder confidence at 83, up from an average of 70 in 2020. All of this points to a promising future for the new residential construction market.<\/p>\n
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<\/a>Photo: James Bombales<\/em><\/p>\n