Home Builder Confidence Downbeat on Tight Credit, Limited Building Lots

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor. The April index marks the third consecutive month with a reading below 50.
The current sales conditions sub-index remained steady in April at 51, and the sales expectations sub-index came in at 57, up four points month-over-month. The sub-index that estimates prospective buyer traffic also remained unchanged at 32.

The NAHB’s chief economist noted:

Job growth is proceeding at a solid pace, mortgage interest rates remain historically low and home prices are affordable. While these factors point to a gradual improvement in housing demand, 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.

The three-month moving average index was down in all four regions of the country, with the biggest decline coming in the West. The West, however, is the only region to maintain an index reading above 50, although just one point above.