Builder confidence declined by one point to 69 in April 2018, according to an announcement from the National Association of Home Builders' this week. Readings over 50 points are considered positive.
In a statement, NAHB pointed to “a lack of buildable lots and increasing construction material costs.” Tariffs imposed on Canadian lumber and other raw materials by the Trump administration “are pushing up prices and hurting housing affordability,” the group said, MarketWatch reports. Other key data points for April show that buyer traffic remained steady at 51 points, the expected future sales index dwindled one point to 77, and the gauge of current sales conditions went down two points to 75.
The 69 reading is still quite strong. In the go-go days of the housing bubble, between 2004 and 2005, sentiment averaged 68. Still, the fact that confidence is declining so steadily is notable. When NAHB’s index started to fall in late 2005, it was one of the signals that foreshadowed the coming housing bust. Now, the demand for housing is fundamental, not speculative. Years of underbuilding have left most housing markets stretched. But builders are keeping the pace of construction slow and steady. And they’re worried about their costs.
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