Even though U.S. homebuilder sentiment did inch up in the month of April, sparse credit conditions for buyers and a lack of supply for building properties and labor continue to drag down industry fundamentals.
The NAHB/Wells Fargo Housing Market index increased to 47 this month, down from a revised 46 in March, the National Association of Home Builders said on Tuesday in a statement. The industry measurement again missed the mark, as economists polled by Reuters had forecast the index would show signs of recovery and increase to 50 in April, but the latest reading was the third in a row to come in below 50.
Index measurements that come in below 50 mean suggest more builders view market conditions as poor than favorable.
“Builder confidence has been in a holding pattern the past three months,” NAHB Chairman Kevin Kelly said in a statement. “Looking ahead, as the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead.”
However, only the index’s single-family home sales component remained unchanged at 51, though the the March measurement was revised downward, again, by 1 point.
“Headwinds that are holding up a more robust recovery include ongoing tight credit conditions for home buyers and the fact that builders in many markets are facing a limited availability of lots and labor,” said the NAHB’s Chief Economist, David Crowe.