Builder confidence in the market for newly constructed, single-family homes dropped two points to 42 this month, according to the National Association of Home Builders/Wells Fargo Housing Market Index, released today.
“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,” Rick Judson, National Association of Home Builders Chairman said in a statement.
However, builders’ outlook for the next six months has improved due to the low inventory of homes for sale, “rock bottom” mortgage rates and rising consumer confidence, according to NAHB Chief Economist David Crowe. Builder expectations for sales for the next half-year inched up three points, reaching the highest level since February 2007.
For three-month averages by region, the Northeast remained at 38 in April, while the Midwest dropped two points to 45, the South decreased by four points to 42 and the West dipped by three points to 55.
The monthly survey asks builders to gauge perception of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor. Any number over 50 shows that most builders view the market positively. At the peak of the housing bubble, homebuilders posted readings in the high 60s and low 70s, the Wall Street Journal reported.