Builder Confidence Perks Up After Three-Month Slide

  • Builder Confidence Perks Up After Three-Month Slide

Builder Confidence Perks Up After Three-Month Slide

The rates of change for industrial production for previous months were revised downward, with output now reported to have advanced at a 2.3% annual rate in the first quarter of the year.

The NAHB's 55+ Housing Market Index shows builder confidence is steady in the senior housing market as well.

Completions, meanwhile, rebounded, up 2.8 percent to 1.26 million-but completions for single-family units totaled 820,000, slipping 4 percent. The average rate on 30-year, fixed-rate mortgages held steady last week at 4.55 percent.

"Unequivocal strength is the message", said analysts at Econoday. Relief appears to be coming where it is most needed, however, he said. "Though tariff effects are a wildcard, manufacturing looks to be an outstanding contributor to this year's economic growth".

In the home building sector, a pair of reports were mixed.

The Commerce Department is scheduled to release a separate report on new residential construction in the month of April on Wednesday. Year-over-year, single-family starts were up 7 percent. New construction of multi-family units tumbled more than 12%.

A hoped-for spring surge in homebuilding to relieve a worsening national housing shortage didn't materialize in April, U.S. Census Bureau data suggests.

Builder Confidence Perks Up After Three-Month Slide

Single-family starts, at 894,000 units annualized, were essentially flat compared with the March level.

Although disappointing month-over-month, National Association of Home Builders (NAHB) Chairman Randy Noel lent perspective, stating "We expected some pullback this month after such a strong March report, but housing starts remain at very healthy levels in April". The benchmark rate rose steadily for most of April, reaching its highest level in more than four years.

"Tight housing inventory, employment gains and demographic tail winds should continue to boost demand for newly-built single-family homes", said Robert Dietz, the NAHB's chief economist. "However, the record-high cost of lumber is hurting builders' bottom lines and making it more hard to produce competitively priced houses for newcomers to the market".

The current single-family home sales index grew to 76 from 74, the sales expectations index for the next six months remained at 77; and the traffic of prospective buyers index held at 51.

Homebuyers have been snapping up newly built houses as the economic outlook has continued to improve in recent months.

The increase comes after four months of declines on the index.

Overall consumer spending declined sharply in the first quarter of the year, hitting its slowest pace in nearly five years. Those costs are contributing to rising home prices, making new homes less affordable, especially for first-time buyers.