Home / Lights & Construction

Although the price of timber has fallen sharply in the past few months, with a higher point falling by about 70%, it is clear that this is not enough to alleviate the pressure on builders.

On Tuesday, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), the single-family home builders confidence index fell 5 points to 75 points in August, the lowest level since July 2020. 50 is the dividing line between prosperity and decline. A reading above 50 indicates that more builders believe that sales are in good condition than those who think that sales are in poor condition.

Currently, builders are facing the dilemma of rising construction materials and technical labor costs. This makes the price of new houses higher and higher, and obviously affects market demand.

Chuck Fowke, NAHB chairman and home builder in Tampa, Florida, said:

Due to higher construction costs, some potential home buyers are experiencing price shocks, and policy makers need to find long-term solutions to supply chain problems.

Robert Dietz, NAHB's Chief Economist, said:

Although the price of wood has improved, the price and supply of other building materials remains a challenge. These materials include floors, lime boards, electrical appliances and windows. Although from the perspective of population and interest, the purchasing power of houses is still solid, but the high cost and material acquisition problems have led to a reduction in the level of housing construction and even hindered the sales of some new houses. However, it is expected that the production bottleneck will be relieved in the next few months, and the market can return to a more normal state.

In the past year or so, housing prices in the United States have soared and blossomed. According to statistics from the National Association of Realtors (NAR), 182 of the 183 metropolitan areas tracked by the National Association of Realtors have higher median sales prices for single-family homes than the same period last year. The median house price of 94% of metropolitan areas has risen by more than 10% over the same period last year. In the second quarter, the median sales price of single-family existing homes rose by 22.9% from a year ago to $357,900, the fastest increase since 1968.

However, with the rapid rise in housing prices, some potential buyers have withdrawn from the market. According to a consumer report surveyed by Fannie Mae in July, about 28% of respondents believe that now is a good time to buy a house, which is the lowest historical data since mid-2010.

Recently, U.S. timber prices plummeted by 70% in three months. As of the 17th, they had fallen to US$456.2 per thousand board feet, the lowest level since July 8 last year, when the price of timber was US$465. Timber has fallen for 13 consecutive weeks. The Chicago Mercantile Exchange's timber futures contract has fallen by more than 70% from its record high of US$1711.2 per thousand board feet in May, at US$500.