Even as lumber prices drop, homebuilder sentiments go up

In the United States (U.S.), homebuilders continue to overcome numerous obstacles, including a severe labour shortage, but the cost of lumber is falling, leaving homebuilders feeling slightly better.

At one point, a monthly sentiment survey by the National Association of Home Builders (NAHB) hit 68, a number that has remained unchanged since October 2017. Any number above 50 is considered to be positive.

“Builders are motivated by solid housing demand, fuelled by a growing economy and a generational low for unemployment,” NAHB Chairman, Randy Noel, said to CNBC. “Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable.”

According to CNBC, the falling lumber prices can be attributed to the rising costs of supplies, and it has seen an approximate five per cent gain in the first four months of 2018, as Robert Dietz, chief economist of NAHB pointed out, leading to an uptick in buyer traffic.