Residential builder sentiment fell two points in March as material costs—particularly for lumber—tick up.
The latest NAHB/Wells Fargo Housing Market Index shows that builder confidence for newly built single-family homes fell two points to 82 in March, down from a peak of 90 in November. This is despite high buyer traffic and strong demand. Regionally, the West remained at the top at 90 (a drop of three points over the month), followed by the South at 82 (a two-point decrease) and the Northeast (up two points) and Midwest (down one point) at 80.
While supply for single family homes is expected to increase this year, the rising price of lumber alone has added around $24,000 to the price of a new home, according to NAHB Chief Economist Robert Dietz. And while mortgage interest rates are still at historical lows, they've also risen about 30 basis points over the last month, he said.
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