Confidence among U.S. single-family homebuilders slipped in January after four straight monthly increases, and builders called for a new softwood lumber agreement with Canada to ease shortages and lower prices, a survey showed on Tuesday.
The National Association of Home Builders/Wells Fargo Housing Market index dipped one point to 83 this month. A reading above 50 indicates that more builders view conditions as good than poor.
"NAHB analysis indicates the aggregate cost of residential construction materials has increased almost 19% since December 2021," NAHB Chairman Chuck Fowke said in a statement. "Policymakers need to take action to fix supply chains. Obtaining a new softwood lumber agreement with Canada and reducing tariffs is an excellent place to start."
According to the NAHB, higher material costs and shortages were adding weeks to typical single-family construction times. The economy is struggling with high inflation, mostly the result of the COVID-19 pandemic, which has snarled supply chains.
The United States last November nearly doubled the duties on imported Canadian softwood lumber to 17.9% after a review of its anti-dumping and countervailing duty orders.
The Trump administration initially imposed 20% duties on Canadian softwood lumber in 2018 after the collapse of talks on a new quota arrangement, but reduced the level in December 2020 to 9%. President Joe Biden's administration had stuck to those duties until the Commerce Department's November review.
The NAHB survey was conducted during the first two weeks of January and does not fully reflect the recent jump in mortgage interest rates. The 30-year fixed-rate mortgage averaged 3.45% during the week ending Jan. 13, up from 3.22% in the prior week, according to data from mortgage finance agency Freddie Mac.
More expensive building materials and higher mortgage rates could make housing less affordable, especially for lower-income groups and first-time home buyers.
The survey's measure of current sales conditions was unchanged at 90, but its gauge of sales expectations over the next six months dropped two points to 83.
The component measuring traffic of prospective buyers also fell two points to 69.
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