The NAHB/Wells Fargo Housing Market Index fell 3 points in April as all components declined on the month. Despite the dip, the index remains at a level consistent with continued gains in new home construction.
Despite Dip, Sentiment Remains Solid
After hitting a fresh cycle-high in March, the NAHB Housing Market Index (HMI) fell 3 points in April to 68. All three HMI components edged lower on the month. The current sales and expected sales measures each fell 3 points.
Despite the pull-back, confidence remains relatively high. The present sales index has trended above 70 for five consecutive months, signaling strong demand for new homes.
Continued Improvement in Residential Construction
All areas except the West saw sentiment fall in April. After a late season blast of winter weather, the Northeast reported an 8-point drop, partially reversing March’s 14-point rise.
The solid readings for builder sentiment coincide with stronger reports for retail sales at home improvement stores, which are up solidly on a three-month annualized basis. Residential investment is one of the few bright spots for first quarter growth.