U.S. home builders are feeling slightly less optimistic about their sales prospects, even as their overall outlook remains favourable.
The National Association of Home Builders/Wells Fargo builder sentiment index released Monday slipped to 68 this month. That’s down three points from 71 in March, when it jumped to the highest level since June 2005.
Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has been above 60 since September.
The April reading fell short of analyst predictions. They expected the index to dip to 70, according to FactSet.
Readings gauging builders’ view of sales now and over the next six months also edged lower, as did a measure of traffic by prospective buyers.
Despite the decline in the latest builder sentiment survey, sales of new U.S. homes have been robust this year and are expected to continue climbing.
Low mortgage rates and a solid job market have helped drive home sales steadily higher. Sales of new U.S. homes increased in February at the fastest pace since July, reaching a seasonally-adjusted annual rate of 592,000. That sales pace was nearly 13 per cent higher than in the same month last year.
A pickup in mortgage rates last fall helped spur sales early this year. In recent weeks, mortgage rates have been edging lower, making the cost of home loans less expensive.
The average 30-year fixed mortgage rate has fallen the past four weeks, declining to 4.08 per cent last week. That’s up from an average of 3.65 per cent all last year, but still low by historical standards.
This month’s builder index was based on 307 respondents.
A measure of current sales conditions for single-family homes fell three points to 74, while a gauge of traffic by prospective buyers declined one point to 52. Builders’ view of sales over the next six months slid three points to 75.Report Typo/Error