Homebuilder Sentiment Falls To Lowest Level In Over A Year

The price of lumber has fallen sharply in the last few months, but apparently that has not been enough to take the pressure off homebuilders.

Sentiment among single-family homebuilders dropped 5 points to 75 in August on the National Association of Home Builders in the U.S. Anything above 50 is considered positive, but that is the lowest reading since July 2020. The index stood at 78 last August.  Of the index’s three components, current sales conditions fell 5 points to 81 and traffic of prospective buyers also fell 5 points to 60. Sales expectations in the next six months were unchanged at 81. Builders are contending with continued rising costs for materials as well as for skilled labour. That is pushing the price of newly built homes ever higher and clearly affecting demand.