Builder confidence in the market for newly built, single-family homes in April rose four points to a level of 56 on the National Association of Home Builders/Wells Fargo Housing Market Index released today.

“As the spring buying season gets underway, home builders are confident that current low interest rates and continued job growth will draw consumers to the market,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.  

March housing starts will be reported Thursday morning.

“The HMI component index measuring future sales expectations rose five points in April to its highest level of the year,” said NAHB Chief Economist David Crowe. “This uptick shows builders are feeling optimistic that the housing market will continue to strengthen throughout 2015.”

This optimism is reflected in the March housing starts forecast from Navy Federal Credit Union, which sees a likely pick up in tomorrow’s report on starts from the Census Bureau.

“Total housing starts likely rose to 1,060 units in March at a seasonally adjusted annual rate  from a weather suppressed 897,000 rate in February,” says Alan MacEachin, Navy Federal corporate economist. “Single-family starts will rise from a seasonally adjusted annual rate of 593,000 to 720,000 in March.  

“Harsh weather over much of the eastern U.S. in February likely held back housing starts during that time as new home sales surged,” MacEachin said. “As a result, builders were probably anxious to begin construction in March as the weather improved to keep up with the rising demand for new homes. Multi-family starts likely rose to 340,000 units in March from 304,000 in February.” 

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components registered gains in April. The component charting sales expectations in the next six months jumped five points to 64, the index measuring buyer traffic increased four points to 41, and the component gauging current sales conditions rose three points to 61.

Looking at the three-month moving averages for regional HMI scores, the South rose one point to 56 and the Northwest held steady at 42. The Midwest fell by two points to 54 and the West dropped three points to 58.