US homebuilder sentiment hits seven-month low in April-NAHB

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A carpenter works on the construction of new townhouses in Tampa, Florida, U.S., May 5, 2021. REUTERS/Octavio Jones/File Photo

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WASHINGTON, April 18 (Reuters) – Confidence among U.S. single-family homebuilders fell to a seven-month low in April as soaring mortgage rates and tighter supply chains pushed housing costs, excluding some first-time buyers from the market, according to a survey. Monday.

The National Association of Home Builders/Wells Fargo Housing Market Index fell two points to 77 this month. The fourth consecutive monthly decline pushed the index to its lowest level since last September. A reading above 50 indicates that more builders rate the conditions as good rather than bad.

Despite record housing stock, shortages as well as the high cost of building materials such as lumber are making it difficult for builders to ramp up production. According to government data, the backlog of homes that have been approved for construction but have not yet started hit a record high in February.

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Home and apartment building permits likely fell in March, according to a Reuters survey of economists. The March housing starts report is expected to be released on Tuesday.

“Policymakers must take proactive steps to address supply chain issues that will lower development costs, stem rising home prices and enable builders to increase production,” said NAHB Chairman , Jerry Konter, in a statement.

The 30-year fixed-rate mortgage averaged 5.0% in the week ending April 14, the highest since February 2011, from 4.72% the previous week, according to data from the mortgage finance agency Freddie Mac. Further increases are likely, with the Federal Reserve adopting aggressive monetary policy as it battles soaring inflation.

More expensive building materials and higher mortgage rates increase the cost of buying a home, making buying a home less affordable, especially for lower-income groups and first-time home buyers . Annual housing prices continue to post double-digit growth.

The survey’s measure of current selling conditions fell to a seven-month low of 85 from 87 in March. But its gauge of sales expectations over the next six months rose three points to 73.

The component measuring traffic from potential buyers fell six points to an eight-month low of 60.

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Reporting by Lucia Mutikani Editing by Chizu Nomiyama

Our standards: The Thomson Reuters Trust Principles.

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