WASHINGTON, D.C. (National Association of Home Builders) – Rising construction costs and a dwindling supply of developed housing lots are causing a slight drop in builder confidence in the market for new single-family homes.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) posted a two-point drop to 42 in April.
“Many builders are expressing frustration over being unable to respond to the rising demand for new homes due to difficulties in obtaining construction credit, overly restrictive mortgage lending rules and construction costs that are increasing at a faster pace than appraised values,” said NAHB Chairman Rick Judson. “While sales conditions are generally improving, these challenges are holding back new building and job creation.”
On a brighter note, the component of the HMI measuring sales expectations over the next six months rose to 53, its highest level since February 2007.