Builder sentiment increased one point to 45 in April; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to CNBC. It reached a record high of 90 in November 2020.
The increase marks the highest reading since September 2022 for the NAHB/Wells Fargo Housing Market Index. The index was at 77 in April 2022.
Of the homebuilder index’s three components, buyer traffic was unchanged at 31; current sales conditions rose two points to 51; and sales expectations in the next six months increased three points to 50.
Builders said one-third of housing inventory is new construction compared with historical norms of about 10%.
“Builders note that additional declines in mortgage rates, to below 6%, will price-in further demand for housing,” said NAHB Chairman Alicia Huey. “Nonetheless, the industry continues to be plagued by building material issues, including lack of access to electrical transformer equipment.”
Just under a third of builders reported cutting prices in April, which is down from 35% at the end of 2022. The share of builders using incentives rose from 58% in March to 59% in April but still was lower than the December 2022 reading of 62%.
