Builders’ confidence in the market for new single-family homes remained high as the National Association of Home Builders' housing market index dipped to 69 in April from 70 in March.

IFR's poll of economists predicted the index would be 70.

National Association of Home Builders' housing market index

“Strong demand for housing is keeping builders optimistic about future market conditions,” NAHB Chairman Randy Noel said. “However, builders are facing supply-side constraints, such as a lack of buildable lots and increasing construction material costs. Tariffs placed on Canadian lumber and other imported products are pushing up prices and hurting housing affordability.”

Ongoing employment gains, rising wages and favorable demographics should spur demand for single-family homes in the months ahead,” according to NAHB Chief Economist Robert Dietz. “The minor dip in builder confidence this month is likely due to winter weather effects, which may be slowing housing activity in some pockets of the country. As we head into the spring home buying season, we can expect the market to continue to make gains at a gradual pace.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

The current single-family home sales index slid to 75 from 77, the sales expectations index for the next six months declined to 77 from 78; and the traffic of prospective buyers index remained 51.

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Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.