ConDig (18-Apr-17).  Builder optimism in the market for newly-built single-family homes dipped in April after shooting higher in March, but remained in positive territory, according the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

The HMI fell three points from the month prior to 68, with scores over 50 indicating that more builders view conditions as good than poor.

“Even with this month’s modest drop, builder confidence is on very firm ground, and builders are reporting strong interest among potential home buyers,” said NAHB chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

“The fact that the HMI measure of current sales conditions has been over 70 for five consecutive months shows that there is continued demand for new construction.”

But the association warned that homebuilders continue to face steep regulatory costs and further rises in building material prices.

All three HMI components recorded losses in April but remain at healthy levels.

Current sales conditions fell three points to 74, while the index charting sales expectations in the next six months dropped three points to 75. The component measuring buyer traffic dipped point down to 52.

The figures suggest that the housing market recovery could be plateauing amid a recent rise in mortgage rates, high regulatory costs and the ongoing impact of elevated labor and material costs.