Financial News: U.S. Homebuilder Confidence Deteriorates Much More Than Ex

U.S. Homebuilder Confidence Deteriorates Much More Than Expected April

(RTTNews) - Reflecting economic uncertainty coupled with rising building material costs and interest rates, the National Association of Home Builders released a report on Wednesday showing a notable deterioration in U.S. homebuilder confidence in the month of April.

The report said the NAHB/Wells Fargo Housing Market Index slumped to 34 in April after inching up to 38 in March. Economists had expected the index to edge down to 37.

With the much bigger than expected decrease, the housing market index dropped to its lowest level since hitting 32 last September.

"Builder sentiment has fallen back in spring as buyers face ongoing elevated interest rates and growing economic uncertainty," said NAHB Chairman Bill Owens.

He added, "The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs, and declines for consumer confidence have slowed the market."

The sharp pullback by the headline index partly reflected a steep drop by the index measuring future sales, which tumbled to 42 in April from 49 in March.

The index gauging current sales conditions also slid to 37 in April from 41 in March, while the index charting traffic of prospective buyers fell to 22 in April from 25 in March.

The NAHB said the latest HMI survey also revealed 36 percent of builders cut prices in April, down slightly from 37 percent in March. The average price reduction was 5 percent in April, down from 6 percent in March.

The use of sales incentives decreased to 60 percent in April from 64 percent in March but still marked the 13th consecutive month this share has reached 60 percent or higher, the NAHB said.

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