The National Association of Home Builders (NAHB)/Wells Fargo housing market index (HMI) for April slipped to 69, down one point from the March reading. The HMI posted an 18-year high of 74 in December 2017. Economists polled by Bloomberg were expecting an index reading of 70 in April.

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor. NAHB Chair Randy Noel said that while demand is boosting builders’ optimism, the lack of buildable lots, higher material costs and tariffs on Canadian timber are challenging new home affordability for consumers.

The current sales conditions subindex for April dipped from 77 to 75, and the subindex that estimates prospective buyer traffic was unchanged at 51. The subindex measuring sales expectations for the next six months slipped by a point to 77.

NAHB chief economist, Robert Dietz, said:

Ongoing employment gains, rising wages and favorable demographics should spur demand for single-family homes in the months ahead. The minor dip in builder confidence this month is likely due to winter weather effects, which may be slowing housing activity in some pockets of the country. As we head into the spring home buying season, we can expect the market to continue to make gains at a gradual pace.

In the NAHB’s regions, three-month moving average indexes fell in three of four regions. In the Midwest the index slipped two points to 66, the West dropped three points to 76 and the Northeast saw a one-point decrease to 55. The index was unchanged at 73 in the South.

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