Sawmills and Wood Preservation NAICS 3211

Mar 25, 2026 - Homebuilder Confidence Remains Low

• Home builder confidence in the single-family market rose slightly in March, but builders remain concerned about housing affordability, higher construction costs, and shortages of buildable lots and labor, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose one point to 38 in March 2026. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The HMI survey also showed that 37% of builders reduced home prices in March to lure potential buyers off the sidelines, although the average price reduction of 6% remained unchanged from February. While the war in Iran and resulting higher oil prices could pose additional challenges, recent executive orders by President Trump aimed at reducing regulatory hurdles to homebuilding are seen as a positive step.
• On March 24, 2026, lumber futures were about $580 per thousand board feet as a weak housing market offset lumber supply constraints, according to Trading Economics. Key lumber demand indicators, including single-family housing starts and building permits, remain soft. Stubbornly high interest rates remain a drag on new single-family home sales. Despite reduced demand due to the lackluster housing market, supply factors, including combined 45% duties on Canadian lumber imports and sawmill shutdowns, have provided a floor for lumber prices.

• Single-family housing starts fell 2.8% month over month and 6.5% year over year in January. The Census Bureau report was delayed by the government shutdown late last year. The number of building permits issued for single-family, privately-owned housing units fell 0.9% month-over-month and dropped 11.6% year-over-year in January 2026. Homebuilders have faced several headwinds, including tariffs that have increased the cost of key inputs like lumber and cabinets, and labor shortages, according to Reuters. While interest rates have fallen in 2026, the US war with Iran is pushing oil prices higher, along with US Treasury yields. Mortgage rates could begin to rise again because they are tied to the benchmark 10-year Treasury yield.
• Affordability constraints in the US housing market are impacting demand for new homes. According to the National Association of Home Builders' (NAHB) 2026 Priced Out Analysis, 52% of US households (70 million) cannot afford a $300,000 home. The median home price in 2026 is about $410,000. At a mortgage rate of 6%, the minimum income needed to purchase a $200,000 home is $55,500, and only 47.5% of US households meet this home-price and minimum income threshold, even though $200,000 is less than half the US median home price. Affordability has been a key roadblock to more Americans joining the ranks of homeownership.