Builder Confidence Edges Higher

The National Association of Home Builders reported builder confidence for newly built single-family homes rose by one point in April.

The NAHB/Wells Fargo Housing Market Index rose to 63 in April. Sentiment levels have held in the low 60s for the past three months.

The index gauging current sales conditions increased by one point to 69 and the component measuring traffic of prospective buyers rose by three points to 47. The measure charting sales expectations in the next six months fell by one point to 71.

Regional three-month moving averages saw the Northeast with a three-point gain to 51, the Midwest up two points to 53 and the South up one point to 67. The West remained unchanged at 69.

“Builders report solid demand for new single-family homes but are also grappling with affordability concerns stemming from a persistent shortage of construction workers and buildable lots, said NAHB Chief Economist Robert Dietz. “Ongoing job growth, favorable demographics and a low-interest rate environment will help to modestly spark sales growth in the near term. However, supply-side headwinds that are putting upward pressure on housing costs will limit more robust growth in the housing market.”

Last week, the Mortgage Bankers Association reported mortgage applications for new home purchases in March jumped by 19 percent from February and by 7 percent from a year ago.

The MBA Builder Applications Survey said by product type, conventional loans composed 68.7 percent of loan applications, FHA loans composed 18.8 percent, RHS/USDA loans composed 0.5 percent and VA loans composed 12 percent. The average loan size of new homes decreased from $340,692 in February to $331,794 in March.