The National Association of Homebuilders (NAHB) announced on Tuesday its housing market index (HMI) stood at 81 in June, down from 83 in May. This was the lowest reading since August 2020.

Economists had forecast the HMI to remain at 83.

A reading over 50 indicates more builders view conditions as good than poor.

All three of the major HMI indices recorded decreases in June. The indicator gauging current sales conditions declined 2 points to 86, while the measure charting sales expectations in the next six months also went down 2 points to 79 and the component measuring traffic of prospective buyers dropped 2 points to 71.

NAHB Chairman Chuck Fowke noted: “Higher costs and declining availability for softwood lumber and other building materials pushed down builder sentiment in June. These higher costs have moved some new homes beyond the budget of prospective buyers, which has slowed the strong pace of home building.”