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Illustration: Trent Joaquin/Axios

Red-hot demand for houses sounds like great news for homebuilders. But builders aren’t as thrilled as you might expect, and one builder is actually turning down orders.

Why it matters: Home prices have surged as low mortgage rates and the pandemic-era demand for more space sent buyers flooding a market that had limited supply.

  • In June, existing-home sales rose in all major U.S. regions. The median price of a home sold was a record-high $363,300.

Driving the news: U.S. homebuilding giant D.R. Horton announced on Thursday that its quarterly revenue and earnings growth beat expectations thanks to demand.

  • But new orders unexpectedly tumbled 17% to 17,952 homes from 21,519 a year ago. Analysts surveyed by Bloomberg were expecting an increase to 22,385.
  • “[W]e have slowed our home sales pace to more closely align to our current production levels,” company chairman Donald Horton said.

The big picture: "Builders are contending with shortages of building materials, buildable lots and skilled labor as well as a challenging regulatory environment," NAHB chief economist Robert Dietz said on Monday after reporting a deterioration in homebuilder sentiment.

Yes, but: After its well-publicized surge, framing lumber prices have crashed all the way back to normal levels.

But, but, but: Framing lumber is just one of many lumber products used to build a house. Oriented strand board (OSB) is another, and the NAHB reports prices for OSB are still up nearly 500% since April 2020.

  • Overall, the changes in prices for these softwood lumber products since April 17, 2020, have added $29,833 to the price of an average single-family home as of July 8, the NAHB estimates.

The bottom line: Soaring prices may sound great for business, but they don’t mean much when costs are too onerous and you don’t have the labor or inventory.

Go deeper

Rising car prices fuel AutoNation's great year

Illustration: Brendan Lynch/Axios

Chip shortages could be viewed as a blessing for AutoNation at this point.

Driving the news: The car chain reported its sixth-consecutive quarterly earnings record on Thursday. That's thanks to higher consumer prices driven by production constraints.

Ben Geman, author of Generate
Oct 22, 2021 - Energy & Environment

The economic spillover from high energy prices

The 6 megawatt Stanton Solar Farm outside of Orlando, Florida. Photo: Paul Hennessy/SOPA Images/LightRocket via Getty Images

The World Bank and International Monetary Fund are out with fresh warnings about the energy commodity run-up, but both also see some relief ahead.

Driving the news: The IMF, in a post on Thursday, projects prices will moderate in the coming months, but also says, "uncertainty remains high and small demand shocks could trigger fresh price spikes."

Changing the inflation conversation

Illustration: Annelise Capossela/Axios

Inflation looks like it’ll run hot for longer than plenty of smart people thought it would. The conversation over just how much more Americans will have to pay for their stuff has taken on a new intensity, as supply problems show few signs of fading.

Why it matters: The rate of price growth has remained consistently strong in recent months — a time that some thought would bring cooling prices after an initial reopening spike. What goes on with prices will influence the decisions made by Congress, the Biden Administration, and the Federal Reserve.

You’ve caught up. Now what?

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