Lumber tariffs, available lots weigh on builder confidence

by Steve Randall17 Apr 2018

The ability of America’s builders to supply homes that are affordable remains hampered by costs and availability.

Builder confidence in the market for newly-built single-family homes slipped in April as the increased cost of Canadian lumber due to tariffs, and weak availability of lots.

The National Association of Home Builders/Wells Fargo Housing Market Index was at a level of 69, down 1 point from March. However, market fundamentals remain strong.

“Ongoing employment gains, rising wages and favorable demographics should spur demand for single-family homes in the months ahead,” said NAHB Chief Economist Robert Dietz. “The minor dip in builder confidence this month is likely due to winter weather effects, which may be slowing housing activity in some pockets of the country. As we head into the spring home buying season, we can expect the market to continue to make gains at a gradual pace.”

Demand still high but outlook weaker
Although the measure of buyer traffic is unchanged this month compared to last, the current and future (6 months’ time) measures are both down.

Looking at the three-month moving averages for regional HMI scores, the South remained unchanged at 73, the Northeast fell one point to 55, the Midwest declined two points to 66, and the West dropped three points to 76.

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