In his remarks in the latest issue of Eye on the Economy, NAHB Chief Economist Robert Dietz provided the following overview of the housing market:
A strong month for home sales in March reinforced the trend of positive housing demand. Sales of new single-family homes grew 15.6% from a year prior, and 5.8% above the previous month’s mark—a noteworthy gain, considering February’s sales benefited from the unseasonably warm weather.
March was also an encouraging month for the existing homes market, which saw sales rise 4.4% to its highest pace in 10 years. Inventory of existing homes for sale remains very tight, standing at only a 3.8 months’ supply. This is a primary reason why the increases of home prices continue to outpace growth in household incomes.
However, supply-side costs remain on the rise as builders continue reporting scarce availability of labor and lots. And the announcement of an effective 20% tariff on Canadian softwood lumber could have a significant, negative impact on construction jobs and wages. One-third of the softwood lumber consumed in the U.S. is imported, about 95% of which comes from Canada.