Builder confidence for new single-family homes is at its highest level since October after a slight uptick in the April National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This month's HMI rose one point to 63 after back-to-back months of 62 in February and March.
"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 Greg Ugalde, NAHB chairman, in a release.
The current sales component also increased one point in April to 69, the highest level since October. The index measuring sales in the next six months dipped one point to 71, while buyer traffic jumped three points to 47—still under the 50-point threshold of good conditions.
Three of the four regional HMIs increased this month, with only the South showing a decline. The Midwest crossed into positive territory at 56, and the Northeast increased four points to 56. The West climbed three points to 72; the South dropped four points to 66. However, the three-month moving averages of the regional indices either increased or remained constant.
"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 in the release. "However, supply-side headwinds that are putting upward pressure on housing costs will limit more robust growth in the housing market."
-Michael Miller, managing editor