U.S. homebuilder sentiment rose for a fourth month in April as limited resale inventory helped drive demand for new houses, suggesting the
The National Association of Home Builders/Wells Fargo gauge edged up one point to a seven-month high of 45, figures showed Monday. Even with the recent improvement, the gauge is well below levels seen at the end of 2021, when mortgage rates were much lower.
"Currently, one-third of housing inventory is new construction, compared to historical norms of a little more than 10%," Robert Dietz, NAHB chief economist, said in a statement. "More
Dietz also said that while lending conditions are tight, "there is not significant evidence thus far that pressure on the regional bank system has made this lending environment for builders and land developers worse."
The NAHB measure of current sales rose to a seven-month high of 51, while the sales expectations index increased 3 points to 50 — the strongest reading since June. A gauge of prospective buyer traffic was unchanged.
Residential real estate was one of the first areas of the economy to buckle from the Federal Reserve's aggressive tightening campaign that started early last year. While 30-year fixed mortgage rates have stabilized, they are about twice as high as they were at the end of 2021 and are restraining demand.
Meantime, the share of builders reducing home prices is trending lower — 30% in April compared with 36% in November, the NAHB said. While the share of firms using incentives climbed to 59% this month, it's still down from 62% at the end of last year, according to the group.
March housing starts and building permits data will be released Tuesday, followed later in the week by existing-home sales.
