Sentiment among homebuilders fell in April for a fourth straight month, reflecting higher lumber prices and limited land availability, according to data Monday from the National Association of Home Builders/Wells Fargo.
The Housing Market Index eased by 1 point to a five-month low of 69 (the estimate was 70). The current sales measure for single-family homes dropped to 75, the lowest since October, from 77. The gauge of prospective buyer traffic held at 51 and the gauge of the six-month sales outlook cooled to 77 from 78.
Soaring lumber prices, partly a reflection of U.S. tariffs, are raising the cost of home construction at the same time mortgage rates near a four-year high hamper affordability. Higher borrowing and materials costs indicate homeownership will be less attractive for those wanting to enter the market for the first time. Developers, nonetheless, remain upbeat about the market's prospects because of a strong job market, bigger after-tax paychecks and improving finances.
"Strong demand for housing is keeping builders optimistic about future conditions," NAHB Chairman Randy Noel, a custom-home builder from Louisiana, said in a statement. "However, builders are facing supply-side constraints, such as a lack of buildable lots and increasing construction material costs. Tariffs place on Canadian lumber and other imported products are pushing up prices and hurting housing affordability."
The confidence gauge fell to a five-month low of 72 in the South and eased 1 point to 76 in the West. The three-month moving average for builder sentiment in the South was unchanged and fell for other three U.S. regions.