Single-family home buying sentiment fell 5 points in August down to 75, its lowest point in over a year, according to the National Association of Home Builders. 

The decline was caused by construction costs, supply shortages, and rising home prices. It marks the steepest drop in home buying sentiment since July 2020.

Sales conditions dropped 5 points to 81, and traffic prospective buyers also dropped 5 points to 60. Sales expectations remained steady at 81, according to the NAHB's montly confidence index.

More than 56% of homes sold between April and June were affordable to families earning an income of $79,000. This marks a 5% drop in homes sold in the first quarter of 2021 and the lowest affordability level since the first quarter of 2012.

“While the demographics and interests for home buying remain solid, higher costs and material access issues have resulted in lower levels of home building and even put a hold on some new home sales,” said NAHB’s chief economist Robert Dietz.

Dietz also noted that bottlenecks should ease by the fall and the market will likely begin returning to normal.