April NAHB housing index up; affordability remains a concern
Builders’ confidence in the market for new single-family homes grew as the National Association of Home Builders' housing market index rose to 63 in April from 62 in March.
IFR's poll of economists predicted the index would be 63.
“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,” NAHB Chairman Greg Ugalde said.
“Ongoing job growth, favorable demographics and a low-interest rate environment will help to modestly spark sales growth in the near term,” according to 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.”
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 grew to 69 from 68, the sales expectations index for the next six months slipped to 70 from 71; and the traffic of prospective buyers index gained to 47 from 44.