FEA’s Weekly Order Survey Participants’ Views Vary Greatly from Region to Region

FEA’s Weekly Order Survey respondents’ views on their market’s activity not only varied from region to region but also appeared to reflect on whether the builder was building custom homes or tract housing. The higher the value of the particular project the more confident the builder seemed to be about the future. The National Association of Realtors® Pending Home Sales Index for August was at its highest level on record, which gave dealers additional reason for optimism as we start Q4. The current high price of lumber, panels and other building materials remains an issue of deep concern with builders. With several builders continuing to indicate that the high cost of materials remains a major factor in their postponing upcoming projects. However, builders are also quick to point out that near historic low interest rates have kept buyers’ interest peaked for new and existing homes over the past several months and they believe that will continue into the foreseeable future. Moreover, the recent surge in new home sales, record low inventory of homes for sale and record high builder confidence belie the notion that high material costs are negatively impacting housing demand. The upward trajectory in lumber and panel prices has flattened and several items have already begun to correct lower. The speed of the correction, however, is nowhere near as fast as the rise and that has dealers and builders concerned that this could be a long and drawn out process. As sales slow, mills and pressure treaters have been able to make great strides in catching up on their late shipments. In fact, there are now some items available for prompt shipment, for the first time since mid-April.