U.S. homebuilders' confidence in the housing market edged higher this month, reflecting improved demand for new homes as the traditional spring home-selling season ramps up.
But the outlook for sales of single-family homes over the next six months dimmed slightly as builders continue to grapple with a shortage of skilled workers, ready-to-build land and rising building materials costs.
The National Association of Home Builders/Wells Fargo builder sentiment index released Monday rose to 47. That's up from February's reading of 46.
Readings below 50 indicate that more builders view sales conditions as poor rather than good.
The overall index had been above 50 from June through January, reflecting a strengthening housing market. The latest reading, based on responses from 296 builders, comes as the spring home-selling season gets going. The season typically sets the pattern for residential hiring and building construction in the ensuing months.
A surprisingly strong pace of new-home sales in January boosted hopes that the spring buying season will be solid enough to lift the overall economy. Sales jumped 9.6 percent to a seasonally adjusted annual rate of 468,000. That's the fastest pace in more than five years.
The strength in purchases followed a slowdown that had been linked to higher mortgage rates and severe winter weather.
Despite the sharp increase in sales of new homes in January, many builders are having trouble finding skilled workers and land parcels cleared for new construction.