Housing inflation, supply chain create builders' perfect storm

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Housing inflation, supply chain create builders' perfect storm
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Homebuilders are facing their own basket of inflation, which is making it more costly to construct a new home. Lumber prices over the past year added over $18,600 to the average price of a new single-family home: NAHB

"What we're seeing on the cost side … they're increasing as of right now," Meritage Homes CEO Phillippe Lord said during the company's earnings call in late January. "We feel like we have the pricing power to maintain our margins into next year.

On a regional basis, homebuilder confidence in the Northeast increased three points to 76, while the West rose one point to 89, the Midwest fell one point to 73 and the South edged one point lower to 86. Residential single-family homes by KB Home are shown under construction in the community of Valley Center, Calif., June 3, 2021.The index's component assessing sales for the next six months fell two points to a reading of 80, while the component for prospective buyer traffic dropped four points to 65. Meanwhile, the component gauging current sales conditions increased one point to a reading of 90.

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