Higher Material Costs, Interest Rates Lower Builder Sentiment

Despite high buyer traffic and strong demand, builder sentiment fell in March as rising lumber and other material prices pushed builder confidence lower. The latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index shows that builder confidence in the market for newly built single-family homes fell two points to 82 in March.

"Though builders continue to see strong buyer traffic, recent increases for material costs and delivery times, particularly for softwood lumber, have depressed builder sentiment this month," said NAHB chairman Chuck Fowke, a custom home builder from Tampa, Florida. "Supply shortages and high demand have caused lumber prices to jump about 200 percent since last April. Policymakers must address building material supply chain issues to help the economy sustain solid growth in 2021."