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Marcus & Millichap CEO Hessam Nadji on the state of the commercial real estate market.
Homebuilder confidence fell in July as supply shortages showed no signs of improving.
Data released Monday by the National Association of Home Builders showed confidence fell by one point to 80, the lowest since August 2020. A score above 50 shows more builders are seeing conditions as good or bad.
“Builders face shortages of building materials, land for construction and skilled labor, as well as a difficult regulatory environment,” said Robert Dietz, chief economist of the NAHB. “This puts upward pressure on home prices and sidelines many potential buyers, even as demand remains strong in an environment of low inventories.”
DESPITE THE DIVE OF WOOD PRICES, HIGH PRICES HERE TO STAY: EXPERTS
The cost of strand board, a material commonly used in residential construction, has climbed more than 500% this year amid a supply shortage caused by COVID-19 lockdowns. Rising lumber prices added $ 36,000 to the cost of building a new home, excluding some buyers from the market.
The price of timber traded at CME Group has plunged 67% from its May high, but most home builders have been unable to take advantage of the lower prices as suppliers are still selling timber that was purchased when the prices were higher, NAHB CEO Jerry Howard told FOX. Business last week.
The NAHB’s three major housing market indices were mixed. The current conditions gauge slipped one point to 86, while the component measuring traffic from potential buyers fell six points to 65. Sales expectations over the next six months rose two points to 81.
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The three-month moving average for constructor sentiment fell four points to 75 in the northeast. It also fell by one point to 71 in the Midwest and two points to 87 in the West. South remained unchanged at 85.
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