Builders' confidence in the market for new single-family homes slipped as the National Association of Home Builders' housing market index — a monthly gauge of builder sentiment — fell to 42 in April from 44 in March.

Thomson Reuters' poll of economists predicted the index would slip to 45.

"Many builders are expressing frustration over being unable to respond to the rising demand for new homes due to difficulties in obtaining construction credit, overly restrictive mortgage lending rules and construction costs that are increasing at a faster pace than appraised values," according to NAHB Chairman Rick Judson. "While sales conditions are generally improving, these challenges are holding back new building and job creation."

"Supply chains for building materials, developed lots and skilled workers will take some time to re-establish themselves following the recession, and in the meantime builders are feeling squeezed by higher costs and limited availability issues," said NAHB Chief Economist David Crowe. "That said, builders' outlook for the next six months has improved due to the low inventory of for-sale homes, rock bottom mortgage rates and rising consumer confidence."

Derived from a monthly survey that NAHB has been conducting for 25 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 fell to 45 from 47, the sales expectations index for the next six months rose to 53 from 50, the highest its been since February 2007, and the traffic of prospective buyers index slipped to 30 from 34.

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