April 17, 2017
Homebuilder confidence dipped 3 points in April to 68 after surging upwards by 6.0 points in March to 71 (which was a 12-year high level). Clearly, builders believe that housing market will perform well in 2017.
Robert Dietz, Chief Economist for the home builders association said, “The fact that the HMI measure of current sales conditions has been over 70 for five consecutive months shows that there is continued demand for new construction,. However, builders are facing several challenges, such as hefty regulatory costs and ongoing increases in building material prices.”
Traffic through the model homes edged lower by 1 point in April to 52 after having jumped 8 points in March to 54 (once again the highest reading thus far in the business cycle).
Not surprisingly there is a close correlation between builder confidence and housing starts. Right now starts are lagging considerably because builders are having some difficulty finding financing, building materials, an adequate supply of finished lots, and skilled labor. Starts currently are at a 1.3 million pace. They should continue to climb gradually in the months ahead and reach 1.4 million by the end of 2017.