The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) rose to 47 this month, indicating a slight improvement in the confidence of home builders in the market for new single family homes.  At the same time the March HMI was revised down to 46 from 47.    

NAHB constructs the HMI from results of a survey it conducts monthly among its homebuilder-members.  Respondents are asked to give their perceptions of current single-family home sales and expectations for those sales over the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low."   Each set of responses as well as the composite are used to calculate seasonally adjusted indices where any number over 50 indicates that more builders view conditions as good than poor. 

NAHB said a Reuters' poll of economists had predicted the HMI would rebound to 50 this month but it remains below that benchmark level through the third consecutive survey.  The HMI had recovered to a post-housing crisis high of 58 late last summer.

"Builder confidence has been in a holding pattern the past three months," said NAHB Chairman Kevin Kelly. "Looking ahead, as the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead."

The component measuring current single family sales was unchanged at 51 from the March number after it was revised down from 52.  Sales expectations over the next six months jumped to 57 from 52, reaching a three month high.  Prospective buyer traffic was unchanged at 32 after the previous figure was revised lower by one point.

"Headwinds that are holding up a more robust recovery include ongoing tight credit conditions for home buyers and the fact that builders in many markets are facing a limited availability of lots and labor," NAHB Chief Economist David Crowe said.

The three-month moving average for the HMI was down in all four regions from respective revised March numbers.  In the Northeast the composite fell from 35 to 33.  In the Midwest the number went from 53 to 49; the South dropped 2 points to 47 and the West went from 60 to 51.