A two point drop was not seem too significant, but the newly released number from the National Association of Home Builders and Wells Fargo Housing Market Index reveals a dip in confidence not seen since late last Summer.
June data indicates that rising material costs and supply chain shortages resulted in builder confidence falling two points to 81 in June. NAHB notes that despite the monthly decline, the index placement above 80 is still a signal of strong demand in a housing market lacking inventory.
All three of the major HMI indices posted declines in June:
- Current sales conditions fell two points to 86
- Sales expectations in the next six months posted a two-point decline to 79
- Traffic of prospective buyers dropped two points to 71
Looking at the three-month moving averages for regional HMI scores:
- South rose one point to 85
- West fell one point to 89
- Midwest dropped three points to 72
- Northeast posted a five-point decline to 78
“Higher costs and declining availability for softwood lumber and other building materials pushed down builder sentiment in June,” said NAHB Chairman Chuck Fowke. “These higher costs have moved some new homes beyond the budget of prospective buyers, which has slowed the strong pace of home building. Policymakers need to focus on supply-chain issues in order to allow the economic recovery to continue.”