Confidence among US home builders fell this month because of concerns that increased demand for new homes is exceeding supplies of ready-to-build land, building materials, and workers.
In the short term, those constraints could slow sales. But builders’ outlook for sales over the next six months has reached its strongest point in more than six years.
The National Association of Home Builders/Wells Fargo builder sentiment index released Monday fell to 44 from 46 in February. It was the second decline since January, which was preceded by eight straight monthly gains.
A measure of current sales conditions declined from February’s reading.
Readings below 50 suggest negative sentiment about the housing market. The last time the index was at 50 or higher was in April 2006.
The index began trending higher in October 2011, when it was 17. That increase coincided with the start of a housing recovery.
Despite the positive sales trends, many builders are facing higher costs for building materials and competition for land cleared for development.
Meanwhile, builders large and small have reported a shortage of workers in markets where residential construction has picked up sharply, such as Texas and Arizona.