Builder confidence remained unchanged in April, registering a reading of 58, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) release Monday morning. Survey data are collected from builders' ratings of the housing market, and a score over 50 suggests that more respondents hold a positive outlook of the home building industry. Home building analysts were expecting a reading of 59.
“Builder confidence has held firm at 58 for three consecutive months, showing that the single-family housing sector continues to recover at a slow but consistent pace,” NAHB Chairman Ed Brady said in a statement. “As we enter the spring home buying season, we should see the market move forward.”
The index's three components ended with mixed results. Traffic among prospective buyers and single family sales for the next 6 months both edged up by 1 point, to a reading of 44 and 62, respectively. Present sales conditions, in the mean time, took a 2-point dip to a score of 63 in April but still showed a 2-point growth year-over-year.
“Builders remain cautiously optimistic about construction growth in 2016,” NAHB Chief Economist Robert Dietz said in a statement. “Solid job creation and low mortgage interest rates will sustain continued gains in the single-family housing market in the months ahead.”
The South and West posted unchanged results, standing at 59 and 67, respectively. Both the Northeast and Midwest saw builder confidence slightly decline from March to April, from 46 to 41, and from 59 to 56, respectively. The West market is still the best performing market for builders.
During the eight years after the financial crisis, all scores have caught up with the pre-recession level last seen in early 2006. The composite index was once at its lowest of 9, as of Dec. 2008. Individual components of the HMI dropped to their lowest point in December 2009, when builders rated current sales conditions at an 8, future sales expectations at a 17, and traffic from prospective buyers at a 7.