Confidence in the newly-built single-family home market rose from 62 to 63 in April according to the NAHB/Wells Fargo Housing Market Index (HMI) released on Tuesday. The index is closely-watched as an indicator of the future health of the US housing market.
Key Takeaways
- The one-point rise in the index measuring sentiment climbing from 62 to 63 in April is in line with market expectations.
- Sentiment has hovered around the low 60s for three months in a row.
- The NAHB chief economist stated that housing costs are still high enough to “limit more robust growth” in the market.
NAHB officials commented on the data, citing affordability as a major issue. Land and labor shortages continue to drive up costs, an issue that has plagued the struggling housing market for months along with high interest rates which have finally ticked downward recently, alleviating some of the pressure.
“Builders report solid demand for new single-family homes but they are also grappling with affordability concerns stemming from a chronic shortage of construction workers and buildable lots,” said NAHB Chairman Greg Ugalde.
Meanwhile, NAHB Chief Economist Robert Dietz stated that “Ongoing job growth, favorable demographics and a low-interest rate environment will help to modestly spark sales growth in the near term.”
While his outlook was positive for near-term progress, he added that “supply-side headwinds that are putting upward pressure on housing costs will limit more robust growth in the housing market.”
NAHB: "Builder Confidence Edges Higher in April"https://t.co/H3G3matdfI pic.twitter.com/trIWTYuqC9
— Bill McBride (@calculatedrisk) April 16, 2019
Report Data
Sales conditions rose from 68 to 69 in April, and the measured traffic of prospective buyers jumped from 44 to 47. Sales expectations for the next six months dipped from 72 to 71.
Regionally, the three-month averages for HMI scores showed the Northeast climbing 3 points to 53, while the South rose one point to 67 and the West saw no change at a flat reading of 69.
Market Reaction
Gold prices have taken a downward turn today, nearing a four-month low as stock markets in Asia, Europe, and the US see strong activity. Gold is now trading at $1,274.28/oz, down -0.97% with a high of $1,288.75/oz and a low of $1,274.12/oz.
June gold futures are down -1.01% at $1,278.25/oz.
Gold Price Chart
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