Trade group: Housing demand exceeds builders’ ability to deliver

Current builder confidence in the market for new homes fell this month, according to a survey by the National Assn. of Home Builders, which said demand was not the problem.

The NAHB/Wells Fargo Housing Market Index, released Monday, blamed a limited supply of ready-to-build-lots, rising materials and labor costs, along with the tougher credit and appraisal standards that prevail in the aftermath of the financial crisis.

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The survey touched on builders’ frustrations at a time when Americans are feeling more confident about the economy and housing.

“Many of our members are reporting increased demand for new homes in their markets,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C.

Despite the current dissatisfaction, the longer-term picture is improving, the group said. A gauge of the outlook for sales over the next six months was at its strongest point in more than six years.

The builder sentiment index released Monday fell to 44 from 46 in February – the second decline since January, which was preceded by eight straight monthly gains. Readings below 50 suggest negative sentiment about the housing market.

The last time the national index was at 50 or higher was in April 2006.

The sentiment was higher in the Western region of the country, where the index moved above 50 in January and stood at 57 in the latest survey.

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