Despite rising lumber prices and the setbacks caused by the coronavirus pandemic, builder confidence is once again on the rise.
Chuck Fowke | Photo credit: NAHB
Nationwide builder sentiment rose by 1 point to 83 in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index. That number was at 30 at the beginning of the pandemic in April. Anything above 50 is considered a good market.
The index is based on a scale from zero to 100 and gauges builder perceptions of single-family homes sales and sale expectations for the next six months.
Amid historically low inventory across the United States, construction is becoming a more attractive option. As a result, lumber is at an all-time high of $1,212.70 per thousand board feet.
“The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances, and other building materials,” NAHB Chairman Chuck Fowke said in a statement. “Though builders are seeking to keep home prices affordable in a market in need of more inventory, policymakers must find ways to increase the supply of building materials as the economy runs hot in 2021.”
Robert Dietz | Photo credit: LinkedIn
Current sales conditions rose 1 point to 88 while buyer traffic grew by 3 points to 75. Sales expectations in the next six months fell 2 points to 81. Builder confidence is highest in the Western region of U.S., clocking in at 92. Confidence is lowest, but still high, in the Midwest at 72.
“NAHB’s forecast is for ongoing growth in single-family construction in 2021, albeit at a lower growth rate than realized in 2020,” NAHB Chief Economist Robert Dietz said in a statement.
