Homebuilder confidence slips amid growing construction costs

Homebuilder confidence slips amid growing construction costs

Homebuilder confidence slips amid growing construction costs
Although homebuilders remain pleased as buyer demand continues to promise them a bright future, concerns about rising construction costs have chipped away at their confidence. The monthly sentiment index from the National Association of Home Builders shows that confidence among America’s homebuilders dropped one point in July to a reading of 80, compared to a reading of 72 during the same month last year.

“Builders are contending with shortages of building materials, buildable lots and skilled labor as well as a challenging regulatory environment,” said Robert Dietz, NAHB’s chief economist. “This is putting upward pressure on home prices and sidelining many prospective home buyers even as demand remains strong in a low-inventory environment.”

While lumber prices have fallen by more than 50 percent in the last couple of months after surging to new highs earlier in the year, those savings have not yet trickled down to builders or consumers.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 2.75 percent and 15-year rates are near 2.00 percent.

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