Builder confidence gains ground in April

Despite rising lumber prices and supply chain issues, builder confidence gained ground in April.

The latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) increased one point to 83 in April.

“Despite strong buyer traffic, builders continue to face challenges to add much-needed housing supply to the market,” said NAHB Chairman Chuck Fowke. “The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances, and other building materials. Though builders are seeking to keep home prices affordable in a market in need of more inventory, policymakers must find ways to increase the supply of building materials as the economy runs hot in 2021.”

The HMI index gauging current sales conditions increased one point to 88 and the gauge charting traffic of prospective buyers posted a three-point gain to 75. The component measuring sales expectations in the next six months fell two points to 81.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose six points 86 and the South moved up one point to 83. The West held steady at 90 and the Midwest fell two points to 78.

“While mortgage interest rates have trended higher since February and home prices continue to outstrip inflation, housing demand appears to be unwavering for now as buyer traffic reached its highest level since November,” said NAHB Chief Economist Robert Dietz. “NAHB’s forecast is for ongoing growth in single-family construction in 2021, albeit at a lower growth rate than realized in 2020.”

The full HMI tables can be found at nahb.org/hmi.