Confidence among homebuilders cooled in April after jumping a month earlier to the highest level since mid-2005, according to data Monday from the National Association of Home Builders/Wells Fargo.
Builder sentiment eased to 68 in April from a reading of 71 in March that was the strongest since June 2005. The median forecast in a Bloomberg survey was for 70; readings greater than 50 indicate more respondents reported good market conditions.
The measure of the six-month sales outlook fell to 75 after a reading of 78 that matched the highest since 2005. The index of current sales cooled to 74 this month from a revised 77 in March that was the highest since June 2005, while a gauge of prospective buyer traffic dipped by 1 point to 52.
The group’s measure has sustained gains since the November election, with industry participants confident that President Trump’s promises of looser regulation and faster growth will offset challenges, including higher costs for building materials. Mortgage rates, which jumped after the November election, are starting to ease and are now at the lowest level since the week ended Dec. 1.
The NAHB’s April measure of potential buyer traffic matched the second-strongest level in almost 12 years, corroborating a report on Thursday that showed consumers have the most favorable views of home buying since 2005.
“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,” NAHB Chief Economist Robert Dietz said in a statement.
Confidence fell in three of four regions, including an 8-point drop in the Northeast and a 5-point decline in the Midwest. Builder sentiment in the West was unchanged and was down 1 point in the South.