Leading the economic recovery? Housing, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), which was recently released. For September, the Index hit an all-time high of 83 for newly-built single-family homes, increasing five points since the last reading and surpassing the previous high of 78 in the Index’s 35-year history.
While builder confidence is high, there are still a few elements that could be a cause for concern, according to experts.
“Historic traffic numbers have builders seeing positive market conditions, but many in the industry are worried about rising costs and delays for building materials, especially lumber,” said NAHB Chairman Chuck Fowke, a custom home builder from Tampa, Fla. “More domestic lumber production or tariff relief is needed to avoid a slowdown in the market in the coming months.”
“Lumber prices are now up more than 170 percent since mid-April, adding more than $16,000 to the price of a typical new single-family home,” said NAHB Chief Economist Robert Dietz. “That said, the suburban shift for home building is keeping builders busy, supported on the demand side by low interest rates. In another sign of this growing trend, builders in other parts of the country have reported receiving calls from customers in high-density markets asking about relocating.”