Amid record-high lumber prices, builder sentiment increased one point in April to 83 following a decrease in March to 82, according to cnbc.com. It reached a record high of 90 in November 2020.
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 2020.
Of the homebuilder index’s three components, current sales conditions rose one point to 88; sales expectations in the next six months decreased two points to 81; and buyer traffic rose three points to 75.
Builders are facing strong demand from potential buyers because of the tight housing market; however, they are struggling to meet that demand as they face supply delivery challenges and high costs for materials.
“The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances and other building materials,” said NAHB Chairman Chuck Fowke, a builder from Tampa, Fla. “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.”