Home builder confidence moved up slightly in April, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Builder confidence in the market for newly-built single-family homes rose one point to 63 in April, and the NAHB notes that sentiment levels have remained in the low 60s for the past three months.
Builders report solid demand for new single-family homes but they are also grappling with affordability concerns stemming from a chronic shortage of construction workers and buildable lots,” said NAHB Chairman Greg Ugalde.
“Ongoing job growth, favorable demographics and a low-interest rate environment will help to modestly spark sales growth in the near term,” said NAHB Chief Economist Robert Dietz. “However, supply-side headwinds that are putting upward pressure on housing costs will limit more robust growth in the housing market.”
Builder confidence hit a high of 70 in May 2018, but has stayed in the 60s and high 50s since. However, the Index’s Present Single Family Sales component has remained slightly higher in the past year, with a slight decline to 61 in December 2018. The NAHB’s Present Single Family Sales Index component for April is 71.
The HMI index gauging current sales conditions increased one point to 69, and the component measuring traffic of prospective buyers rose three points to 47. The measure charting sales expectations in the next six months fell one point to 71.
By region, the Midwest saw the biggest month over month gain, up to 56 from March’s Index score of 49. The West lead with the highest index score, at 72 in April. Year over year, however, the West has dropped from 76.
Looking at the three-month moving averages for regional HMI scores, the Northeast posted a three-point gain to 51, the Midwest increased two points to 53, and the South was up one point to 67. The West remained unchanged at 69.
Find more about the NAHB/Wells Fargo HMI here.