After seven months of improvements, builder confidence faltered in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index, which dropped three points for the month to a reading of 25. Despite the drop, the index remained 56% higher year-over-year.
Drops were recorded in each of the index’s three components, as measurements of current single-family home sales and sales expectations for the next six months each down three points to 26 and 32, respectively. The third component, a measure of prospective-buyer traffic, was down four points to 18.
The decline came as a surprise to David Goldberg, an economist specializing in home building and building products at international financial services firm UBS, who had anticipated a one-point gain. In a statement regarding the numbers, he attributed the turnaround, at least in part, "to a pull forward of demand as a result of better weather in the early part of the selling season," adding that such throwbacks are supportive of UBS’ view that "a gradual improvement—as opposed to a more robust recovery—in housing is underway."
NAHB Chief Economist David Crowe also chalked the decline up to a glitch in builder sentiment’s forward march, but added that "interest expressed by buyers in the past few months has yet to translate into expected sales activity."
Regionally, the Midwest accounted for most of the decline with an eight-point drop. The Northeast picked up while the West stayed flat and the South ticked downward.
To see the full release discussing the index results, click here.
Claire Easley is a senior editor at Builder.
Learn more about markets featured in this article: Greenville, SC.