Builder sentiment fell four points to 34 in April; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to NAHB. It reached a record high of 90 in November 2020.
“Builder sentiment has fallen back in spring as buyers face ongoing elevated interest rates and growing economic uncertainty,” said NAHB Chairman Bill Owens. “The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs, and declines for consumer confidence have slowed the market.”
Regarding the three components of the homebuilder index, current sales conditions fell four points to 37; sales expectations dropped seven points to 42; and buyer traffic decreased three points to 22.
Thirty-six percent of builders reported cutting prices in April compared with 37% in March, 36% in February, and 40% in January. The average price discount was 5%, which is down from 6% in March. Sixty percent of builders were using sales incentives other than price cuts to improve sales in April, which is down from 64% in March; this marks the 13th consecutive month the use of sales incentives has exceeded 60%.
