The confidence index of US homebuilders fell to a 13-month low in August because of high prices and costs and persistent supply shortages.
National Association of Residential Builders (NAHB) / Wells Fargo & CoData released on Tuesday showed that the index of builders' confidence fell for the third month in a row, to 75 from 80 in July, the biggest decline since April 2020. Economists expect the median to be flat at 80.
Although the recent drop in the price of building materials such as wood is good news for builders, some buyers still do not enter the market because of strong demand and low inventories. As supply chain restrictions start to improve, potential buyers are more likely to get more choices and lower prices in the short term, NAHB said.
"our expectation is that production of bottle necks will ease in the coming months and the market should be able to return to a more normal state," Robert Dietz, chief economist at NAHB, said in a statement.