Builder Confidence Slips in April for Fourth Straight Month

By Mark Lieberman

Managing Director and Senior Economist

Data Highlights:

  • Housing Market Index EDGED DOWN one points in April to 69;
  • The index of current sales FELL two points to 79, the index of future (six months hence) sales DROPPED one point to 75; the index of buyer traffic WASX FLAT at 51;
  • By region, builder confidence FELL two points in the South and one in the West; The index ROSE one point in the Northeast and was flat in the Midwest.


  • Overall index has fallen four straight months
  • At 69, the index is at its lowest level since last November
  • The index has been positive (i.e. over 5046 straight months

Data Source: National Association of Home Builders

Image result for home building

Home building continued to slip in April, with builder confidence – measured by The National Association of Home Builders (NAHB) Housing Market Index (HMI) – falling. The drop, attributable to the new tax bill which removed incentives for homeownership, ironically was reported the same day the Commerce Department offered data to suggest other aspects of the tax bill were helping the economy by boosting retail sales.

But the new law capped the deductible amount of mortgage interest as well local property taxes.

Builder confidence fell in the same month for which the Bureau of Labor Statistics reported a decline in the number of residential construction jobs, the first decline in those jobs in six months.

The dip in confidence coincided with a steady increase in mortgage rates. Freddie Mac reported last Thursday the rate for a 30-year fixed rate mortgage was 4.42 percent, up from 3.95 percent at the beginning of the year. The average rate for an adjustable rate loan as reported last week was 3.61 percent compared with 3.45 percent at the beginning of January.

The rates combined with the dip in builder confidence could foreshadow another housing crunch with ripple effects throughout the economy.

The Census Bureau and Department of Housing and Urban Development will report tomorrow on new housing permits and starts albeit for March.

Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am Eastern Time. Follow Mark Lieberman on Twitter at @ foxeconomics.


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