US homebuilder sentiment 'cautiously optimistic' in April: Report

By Ovunc Kutlu

ISTANBUL (AA) – Homebuilder sentiment in the US remained "cautiously optimistic" in April, according to a report released Monday.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) rose just one point to 45 this month from 44 in March.

While a level above 50 is considered positive for the housing sector, the index measures sentiment among homebuilders and is considered an important indicator for housing investment and consumer spending on appliances and furnishings, which have an effect on the overall economy.

"For the fourth straight month, builder confidence has increased due to a lack of resale inventory despite elevated interest rates," NAHB Chairman Alicia Huey said in a statement.

"Builders note that additional declines in mortgage rates, to below 6%, will price-in further demand for housing. Nonetheless, the industry continues to be plagued by building material issues, including lack of access to electrical transformer equipment," she added.

NAHB chief economist Robert Dietz said one-third of housing inventory is new construction, compared to historical levels of just more than 10%.

While the share of builders reducing home prices continues falling, at 30% in April from 31% in March and 36% in November, the average price reduction in April was 6% – the same as in March but lower than in December, according to the report.