Economic optimism declines

Monday, April 16, 2001 | 11:14 a.m.

WASHINGTON -- Optimism among U.S. home builders fell in April for the first time in three months as the slowing economy made prospective home buyers more cautious, a construction industry survey showed today.

The National Association of Home Builders' housing market index declined to 56 this month from a revised 58 in March and 57 in February. A reading above 50 signals a majority of builders are positive about market conditions.

The last time the housing market index fell below 50 was June 1995 when it registered 45. The April reading was the lowest since January when it was 55. Previously, the low for the index was 55 in May 1997. In February 1997 the index stood at 54.

"While significant strength remains in the overall housing market, builders are perceiving a bit more hesitancy among potential buyers," said Bruce Smith, president of the trade group and a builder from Walnut Creek, Calif. "People are out there looking, but some are less likely to commit in the face of current economic conditions," he said.

The index of expected sales of new homes over the next six months decreased to 63 during April from 67 in March. An index of current sales fell to 62 from 66. An index measuring traffic of prospective buyers, however, rose to 41 this month from 40 a month earlier.