by Calculated Risk on 4/17/2023 10:06:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 45, up from 44 last month. Any number below 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Lack of Existing Inventory Continues to Support Builder Sentiment

Builders remained cautiously optimistic in April as limited resale inventory helped to increase demand in the new home market even as the industry continues to grapple with building material issues.

Builder confidence in the market for newly built single-family homes in April rose one point to 45, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

Currently, one-third of housing inventory is new construction, compared to historical norms of a little more than 10%. More buyers looking at new homes, along with the use of sales incentives, have supported new home sales since the start of 2023.
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The HMI index gauging current sales conditions in April rose two points to 51 and the component charting sales expectations in the next six months increased three points to 50. This marks the first time these components both returned to the 50+ range since June 2022. The gauge measuring traffic of prospective buyers remained unchanged at 31. This is the first time the traffic component failed to improve in 2023.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose four points to 46, the Midwest edged up two points to 37, the South increased four points to 49 and the West moved four points higher to 38.
emphasis added

Click on graph for larger image.

This graph shows the NAHB index since Jan 1985.

This was at the consensus forecast. 

The "traffic of prospective buyers" is still well below breakeven at 31 (below 50).