Strong buyer demand pushed home builder confidence up in April even as builders continued to grapple with rising lumber prices and supply chain issues and consumers faced higher home prices due to a lack inventory.
The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) shows builder confidence in the market for newly-built single-family homes rose one point to 83 in April.
“Despite strong buyer traffic, builders continue to face challenges to add much needed housing supply to the market,” said NAHB Chairman Chuck Fowke, a custom home builder from Tampa, Fla.
The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances and other building materials, the association said.
Fowke offered: “Though builders are seeking to keep home prices affordable in a market in need of more inventory, policymakers must find ways to increase the supply of building materials as the economy runs hot in 2021.”
NAHB Chief Economist Robert Dietz added, “While mortgage interest rates have trended higher since February and home prices continue to outstrip inflation, housing demand appears to be unwavering for now as buyer traffic reached its highest level since November.”
NAHB’s forecast is for ongoing growth in single-family construction in 2021, although at a lower growth rate than was realized in 2020.
The HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The index gauging current sales conditions rose one point to 88.