Builder confidence dropped by one point in April to a level of 69, according to the National Association of Home Builders/Wells Fargo Housing Market Index.

Despite the downward tick, the confidence level remains sturdy overall, according to NAHB Chairman Randy Noel.

“Strong demand for housing is keeping builders optimistic about future market conditions,” Noel said in a statement.

However, he credits challenges such as a lack of buildable lots and increasing construction material costs as increasingly taxing on the construction industry. Tariffs on Canadian lumber and imported products are also hurting housing affordability, he said.

NAHB Chief Economist Robert Dietz said in a statement that the dip in confidence is likely due to winter weather slowing housing activity in some parts of the country.

“As we head into the spring home buying season, we can expect the market to continue to make gains at a gradual pace,” Dietz said.

Sales expectations for the next six months also dropped on the index by one point to a level of 77, and the component gauging confidence about current sales conditions fell by two points to 75.

Regionally, builder confidence in the South held at 73, the Northeast dropped by one point to 55, the Midwest fell two points to 66 and the West fell three points to 76 on the index.