Builder sentiment in the market for single-family homes fell sharply in May, as mortgage rates shot higher and building material costs showed no relief.

Sentiment fell an outsized 8 points to 69 in May, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Readings above 50 are considered positive, but this is the fifth straight month that builder sentiment has declined.

It’s the lowest reading since June 2020, when builders had a brief, quick negative reaction to the beginning of the Covid pandemic before rapidly bouncing back. As the economy shut down, demand for single-family homes with outdoor space in the suburbs skyrocketed. Builder sentiment hit a record high of 90 by November 2020.

Taking out that pandemic effect, this month’s reading is the lowest since September 2019, when the U.S. trade dispute with China was taking a hard toll on building material supply chains.

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