Despite the fact that the spring home buying season has arrived, builder confidence in the market for newly built, single-family homes was relatively flat in April compared to March, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
Builder confidence rose one percentage point to reach 47 on the index, up slightly from a downwardly revised March reading of 46.
‘Builder confidence has been in a holding pattern the past three months,’ says Kevin Kelly, chairman of NAHB, in a release. ‘Looking ahead, as the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead.’
‘Job growth is proceeding at a solid pace, mortgage interest rates remain historically low and home prices are affordable,’ adds David Crowe, chief economist for NAHB. ‘While these factors point to a gradual improvement in housing demand, headwinds that are holding up a more robust recovery include ongoing tight credit conditions for home buyers and the fact that builders in many markets are facing a limited availability of lots and labor.’
The HMI index gauging current sales conditions in April held steady at 51 while the component gauging traffic of prospective buyers also remained unchanged at 32. The component measuring expectations for future sales rose four points to 57.
The HMI three-month moving average was down in all four regions. The West fell nine points to 51, and the Midwest posted a four-point decline to 49, while the Northeast and South each dropped two points to 33 and 47, respectively.