Homebuilder Confidence Slips as Foot Traffic Declines, Materials Prices Soar, and Supply Chains Issues Rattle

Confidence among U.S. homebuilders unexpectedly slipped in January after four straight monthly increases.

Builders say that prices for materials, especially lumber, are a drag on the industry. In December, the price of framing lumber rose 22 percent and was up 135 percent from its low in August. Many components and durable goods used in the construction of new homes are in short supply, according to many builders.

The component of the index that tracks foot traffic declined in January, which may suggest that the surge in Covid-19 cases is dampening demand or at least the willingness of would-be buyers to look at new homes. The six-month outlook for the business also declined.

Current sales conditions held steady, however.

Regionally, the indexes for the Northeast, South, and Midwest declined. The index for the West climbed.