After making a lackluster comeback last month and led by the South, home builders grew less confident this month. Hurting conditions are recent Trump administration tariffs on Canadian lumber.
A gauge for the current state of builder confidence, the Housing Market Index, was a seasonally adjusted 68 in June. An index in excess of 50 indicates that more builders view conditions as good than poor.
But while the index remains above 50, it was lower than 70 in May — when it was was up for the first time in five months. The HMI stands two points above the downwardly revised level in June 2017.
The index from the National Association of Home Builders and Wells Fargo was announced Monday.
NAHB Chairman Randy Noel warned in the report that builders’ growing concerns over tariffs on Canadian lumber and other imported products are hurting housing affordability — with nearly $9,000 being added to the cost to construct a new home since early 2017 thanks to record-high lumber prices.
NAHB Chief Economist Robert Dietz echoed Noel’s sentiment.
“Builders do need access to lumber and other construction materials at reasonable costs in order to provide homes at competitive price points, particularly for the entry-level market where inventory is most needed,” Dietz said.
A one-point month-over-month loss for each of the index’s three components left the index measuring current sales conditions at 75, the component gauging expectations in the next six months at 76 and the metric charting buyer traffic at 50.
Based on a three-month moving average, the index in the South fell a point to 71. No change left the West’s index at 76 and the Midwest’s index at 65. The Northeast climbed two points to 57.
