The National Association of Home Builders (NAHB)/Wells
Fargo Housing Market Index (HMI) set a new high this month, breaking a record
that it set only 30 days earlier. The Index, a measure of builder confidence in
the new home market, rose 5 points to 83 in September. A 6-point increase in
August had shot the Index to 78, tying it with the previous high set in
December 1988.
"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. "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."