By Xavier Fontdegloria

Home-builder confidence in the U.S. declined in June to its lowest level since August 2020 amid rising material prices and supply-chain strains, according to a measure released Tuesday from the National Association of Home Builders. Here are the report's main takeaways:

--The association's housing market index, which gauges the single-family housing market, decreased to 81 in June from 83 in May. A number above 50 indicates that more builders view conditions as good than poor.

--Economists polled by the Wall Street Journal expected the indicator be unchanged from the previous month at 83.

--The index is still a sign of strong demand, after reaching an all-time high of 90 in November 2020.

--"Higher costs and declining availability for softwood lumber and other building materials pushed down builder sentiment in June," NAHB Chairman Chuck Fowke said. Rising costs have moved some new homes beyond the budget of prospective buyers, which has slowed the strong pace of home building, he said.

--Builders have adopted price escalation clauses to deal with scarce building materials, labor and lots, NAHB Chief Economist Robert Dietz said. Despite these strategies, increases for new home prices are pushing some buyers to the sidelines, he said.

--All three of the major HMI indexes deteriorated in June compared with the previous month. The index gauging current sales conditions decreased two points to 86, the component measuring sales expectations in the next six months fell two points to 79, and the measure charting traffic of prospective buyers also dropped two points to 71.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

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June 15, 2021 10:14 ET (14:14 GMT)