The latest NAHB/Wells Fargo Housing Market Index shows a slight upward push in builder sentiment, with confidence in the market for newly built single-family homes up by one point to 83 for April.
“Despite strong buyer traffic, builders continue to face challenges to add much-needed housing supply to the market,” says 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 NAHB/Wells Fargo HMI gauges builders’ perceptions of single-family home sales, sales expectations, and traffic of prospective buyers based on a monthly survey, and uses scores from each component to calculate the main index. Any number over 50 indicates that more builders view conditions as good than as poor.
The HMI index gauging current sales conditions rose by one point to 88, while the index of traffic of prospective buyers rose by three points to 75. At the same time, the index measuring sales expectations over the next six months fell two points to 81.
At the regional level, the three-month moving average HMI for the Northeast rose by six points to 86, while the South’s three-month moving average HMI rose one point to 83. By the same metric, the West remained 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,” says 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.”
