(Reuters) - Confidence among U.S. single-family homebuilders edged up in September, reversing a three-month decline as elevated costs for some building materials including softwood lumber eased, a survey showed on Monday.
The National Association of Home Builders/Wells Fargo Housing Market Index rose one point to 76 last month. A reading above 50 indicates that more builders view conditions as good than poor.
Builder sentiment hit an all-time high of 90 last November as the COVID-19 pandemic fueled a housing market boom, with more people forced to work from home. The outlook for builders has since cooled, with many citing chronic labor shortages and spiraling construction costs as supply chain disruptions at saw mills and ports saw rocketing prices for lumber and some other raw materials. Tariffs on steel imports have also added to building costs.
"The September data show stability as some building material cost challenges ease, particularly for softwood lumber," NAHB Chairman Chuck Fowke said in a statement. "However, delivery times remain extended and the chronic construction labor shortage is expected to persist as the overall labor market recovers."
Lumber is down more than 60% from its May peak but overall aggregate residential construction material costs increased 13% on an annual basis in the first eight months of this year, according to the NAHB. When combined with the recent surge in home price growth, builders see housing affordability as an issue in the months ahead.
The survey's measure of current sales conditions also increased one point to 82 and its gauge of sales expectations over the next six months remained unchanged at 81. The component measuring traffic of prospective buyers rose 2 points to 61.
"The single-family building market has moved off the unsustainably hot pace of construction of last fall and has reached a still hot but more stable level of activity," said Robert Dietz, the NAHB's chief economist.