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The HMI index measuring current sales conditions dipped three points to 86, and the gauge measuring sales expectations in the next six months posted a whopping 10-point decline to 70. Meanwhile, the component charting traffic of prospective buyers increased two points to 67.

Regionally, the Northeast HMI decreased seven points to 69, the Midwest decreased one point to 72, and the South decreased three points to 83. Builder confidence in the West moved up one point to 90.

“While builders continue to report solid buyer traffic numbers, helped by historically low existing home inventory and a persistent housing deficit, increasing development and construction costs have taken a toll on builder confidence,” said NAHB chairman Jerry Konter. “We call upon policymakers to act now to ease supply-chain woes. Improving access to lumber, OSB and other materials will help builders increase the supply of badly-needed housing and fight inflation.”