Currently Reading

Home Builder Sentiment Drops to Lowest Level Since 2020

Market Data + Trends

Home Builder Sentiment Drops to Lowest Level Since 2020

August 18, 2021
Photo: Pichsakul |

Home builder sentiment dropped to its lowest level since July 2020 amid continued labor and building material challenges. The National Association of Home Builders/Wells Fargo Housing Market Index reported builder sentiment at 75 in August, down 5 points from last month's index. Anything over 50 is considered positive. The index reports on three components: current sales conditions, traffic of prospective buyers, and sales expectations in the next six months. Future sales expectations remained at 81 while the other two components fell 5 points to 81 for current sales conditions and 60 for traffic of prospective buyers.

Builders are contending with continued rising costs for materials as well as for skilled labor. That is pushing the price of newly built homes ever higher and clearly affecting demand.

More than 56% of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $79,900. This is down sharply from the 63.1% of homes sold in the first quarter of 2021 and the lowest affordability level since the beginning of the NAHB’s revised series in the first quarter of 2012. 

“Some prospective buyers are experiencing sticker shock due to higher construction costs,” said NAHB Chairman Chuck Fowke, a homebuilder from Tampa, Florida. “Policymakers need to find long-term solutions to supply-chain issues.” 

The price of lumber has come down dramatically since its peak earlier this year. Lumber fell 4.91% on Monday to settle at $470.90, its lowest since July 6, 2020. Lumber is down 72.48% from its intraday peak of $1,711.20 on May 10.

“While lumber prices are showing improvement, the price and availability of other building materials remain a challenge. These materials include flooring, drywall, appliances and windows, said the NAHB’s chief economist, Robert Dietz.

Read More

Related Stories

Built for Rent

Single-Family Rentals Are Taking Over the Housing Market

For some, single-family rentals are taking precedence over homeownership.

Market Data + Trends

September Reports Increased Home Sales

Monthly home sales rebounded in September after August decline.


More in Category


Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.