Builders ‘Cautiously Optimistic’ as Confidence Levels Grow One Point

Builder confidence rose one point to a level of 45 in April on the National Association of Home Builders/Wells Fargo Housing Market Index.

The gain shows builders are “cautiously optimistic” due to an increase in demand in the new home market brought on by limited resale inventory, NAHB stated.

“For the fourth straight month, builder confidence has increased due to a lack of resale inventory despite elevated interest rates,” NAHB Chairman Alicia Huey said in a statement. “Builders note that additional declines in mortgage rates, to below 6%, will price-in further demand for housing. Nonetheless, the industry continues to be plagued by building material issues, including lack of access to electrical transformer equipment.”

Confidence levels over 50 indicate that more builders view conditions as good than poor.

“Currently, one-third of housing inventory is new construction, compared to historical norms of a little more than 10%,” NAHB Chief Economist Robert Dietz added. “More buyers looking at new homes, along with the use of sales incentives, have supported new home sales since the start of 2023.”