U.S. Homebuilder Confidence Shows Modest Improvement In April

A report released by the National Association of Home Builders on Tuesday showed a modest improvement in U.S. homebuilder confidence in the month of April.

The report said the NAHB/Wells Fargo Housing Market Index inched up to 63 in April after holding at 62 in March, with the uptick matching expectations.

"Builders report solid demand for new single-family homes but they are also grappling with affordability concerns stemming from a chronic shortage of construction workers and buildable lots," said NAHB Chairman Greg Ugalde.

The modest increase by the housing market index came as the component measuring traffic of prospective buyers jumped to 47 in April from 44 in March.

The component gauging current sales conditions also crept up to 69 in April from 68 in March, although the measure charting sales expectations in the next six months edged down to 71 from 72.

"Ongoing job growth, favorable demographics and a low-interest rate environment will help to modestly spark sales growth in the near term," said NAHB Chief Economist Robert Dietz.

He added, "However, supply-side headwinds that are putting upward pressure on housing costs will limit more robust growth in the housing market."

On Friday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of March.

Housing starts are expected to jump to an annual rate of 1.230 million in March, while building permits are expected to rise to a rate of 1.299 million.