Builders increased construction of single-family homes in August as buyers continued to swarm the new-home market. The pace of single-family starts last month reached its highest level since February, just before the COVID-19 pandemic ignited across the U.S.
Single-family starts rose 4.1% in August to a seasonally adjusted annual rate, of 1.02 million the Commerce Department reported Thursday. Meanwhile, homebuilder sentiment last month rose to an all-time high as builders felt upbeat about current and future sales.
However, rising lumber costs could threaten to price more home buyers out of the new-home market over the coming months. Lumber prices are now up more than 170% since mid-April, adding more than $16,000 to the price of a typical new single-family home, says Robert Dietz, chief economist of the National Association of Home Builders. Low mortgage rates are helping to offset the rising costs somewhat.
“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.”
Source: National Association of Realtors, Realtor Magazine
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