WASHINGTON (Reuters] – U.S. single-family housebuilders lost confidence in January, following four monthly gains. A survey on Tuesday showed that builders wanted a new agreement with Canada for softwood lumber to alleviate shortages and reduce prices.

This month, the National Association of Home Builders/Wells Fargo Housing Market Index dropped one point to 83. If the reading is above 50, it means that builders are more optimistic about conditions than they were in previous months.

Chuck Fowke (NAHB chairman) stated in a statement that “NAHB analysis shows the aggregate cost for residential construction materials has increased nearly 19% since Dec 2021.” It is up to policymakers to address supply chain issues. A great place to start is to get a new agreement for softwood lumber with Canada.

According to NAHB, increased materials costs and shortages caused a delay of several weeks in typical construction for single families. Inflation is the main problem for the economy. This can be attributed to COVID-19, which has made it difficult for supply chains.

After a thorough review of the countervailing and antidumping duty orders, the United States nearly doubled its duties on Canadian softwood lumber imported from Canada in November.

After talks collapsed on a new Canadian quota agreement, the Trump administration originally imposed 20 percent duties on Canadian softwood lumber. However, the levels were reduced to 9% in December 2020. These duties were maintained by President Joe Biden until November’s review by the Commerce Department.

NAHB’s survey was done in the second week of January, and may not reflect recent rises in mortgage rates. Data from Mortgage Finance Agency shows that the 30-year fixed-rate mortgage reached 3.45% for the week ending January 13. This is an improvement of the previous week’s 3.22%. Freddie Mac (OTC:).

Higher mortgage rates and more expensive materials could mean housing is less affordable for first-time buyers and those with lower incomes.

While the survey measured current sales conditions at 90, it was not modified. However, its measure of sales expectations for the next six-months dropped to 83.

Also, the component that tracks traffic to prospective buyers fell by two points, to 69.