US Homebuilder optimism affected by rising material costs - Wells Fargo

According to analysts from Wells Fargo, the decline in the NAHB housing index, reflects rising material price concerns. 

Key Quotes: 

“Dropping two points for the second straight month, homebuilder optimism, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), slipped to its lowest level since
Nov. 2016. According to survey participants, rising lumber prices have become an increasing concern as higher costs have further hurt home affordability. Lumber prices are up around 17 percent from the recent cycle low registered in late June.”

“By region, optimism was mixed as gains in the Northeast and West were more than offset by sizeable declines in the South and Midwest. Mirroring the headline index, all three components– current sales, future sales and prospective buyer traffic–fell on the month but all remain solidly in positive territory.”

“Today’s HMI performance points to some softening in starts activity, though healthy demand remains positive to the outlook.”