Despite soaring lumber prices, builder sentiment increased one point in February to 84 following a decrease in January to 83; it reached a record high of 90 in November 2020, according to cnbc.com. Any reading above 50 indicates a positive market; the National Association of Home Builders/Wells Fargo Housing Market Index had fallen to 30 in April.
Of the homebuilder index’s three components, current sales conditions held steady at 90; sales expectations in the next six months decreased three points to 80; and buyer traffic increased four points to 72.
“Demand conditions remain solid due to demographics, low mortgage rates and the suburban shift to lower-cost markets, but we expect to see some cooling in growth rates for residential construction in 2021 due to cost factors, supply chain issues and regulatory risks,” said NAHB Chief Economist Robert Dietz. “Some builders are at capacity and may not be able to expand production due to these headwinds.”
