Economic Report: Home builder confidence slides for fourth straight month

The numbers: The National Association of Home Builders’ monthly confidence gauge ticked down one point to a reading of 69 in April, the group said Monday.

What happened: The closely-watched sentiment tracker from the home builder lobby group hit its highest point since 1999 in December, and has fallen every month since then.

Economists surveyed by Econoday had forecast an unchanged reading of 70.

In April, the sub-gauge of current sales conditions fell two points to 75, and the index of future sales expectations edged down one point to 77. The tracker of buyer traffic was unchanged at 51.

Any reading over 50 signals improving conditions.

Read: Most house hunters have been searching for 3 months or more

The big picture: The 69 reading is still quite strong. In the go-go days of the housing bubble, between 2004 and 2005, sentiment averaged 68. Still, the fact that confidence is declining so steadily is notable. When NAHB’s index started to fall in late 2005, it was one of the signals that foreshadowed the coming housing bust.

Now, the demand for housing is fundamental, not speculative. Years of underbuilding have left most housing markets stretched. But builders are keeping the pace of construction slow and steady. And they’re worried about their costs.

In a statement, NAHB pointed to “a lack of buildable lots and increasing construction material costs.” Tariffs imposed on Canadian lumber and other raw materials by the Trump administration “are pushing up prices and hurting housing affordability,” the group said.

Market reaction: Most large publicly-traded builders have had a tough 2018. Shares of D.R. Horton Inc., DHI, +0.79%   the largest U.S. builder, are down 13% in the year to date.

Read: Home prices go through the roof, defying forecast of tax-law hit

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