(Bloomberg) -- US homebuilder sentiment leveled off this month after a recent surge as would-be home buyers look for signs borrowing costs will fall.

The National Association of Home Builders/Wells Fargo index of housing market conditions held at 51 in April, still the highest since July but breaking a string of four straight monthly gains, according to data released Monday. The reading matched the median estimate of economists surveyed by Bloomberg.

“April’s flat reading suggests potential for demand growth is there, but buyers are hesitating until they can better gauge where interest rates are headed,” NAHB Chief Economist Robert Dietz said in a statement. 

The latest figure represents a pause in what is otherwise a resurgent housing market. Some of the nation’s biggest homebuilders have recently reported robust order books and said consumers are growing accustomed to still-high mortgage rates. 

Sentiment remains below the highs reached in late 2020 when borrowing costs were less than half the current level that’s near 7%. In a sign of the market’s fragility, an index of homebuilder stocks slipped 5.1% on April 10 after a higher-than-expected inflation report weakened hopes the Federal Reserve will cut interest rates soon. 

The homebuilder group’s measure of expected sales in the next six months slipped to 60 this month from 62, the first drop since November. Measures of current sales and prospective buyer traffic increased slightly.

Builders have been backing away from price cuts as mortgage rates stabilized below the nearly 8% levels they hit last fall. In April, 22% of builders reported cutting prices, compared with the 24% who cut prices in March and the 36% who cut prices in December. The share of builders offering customers some form of sales incentive fell by 3 percentage points to 57% April , the NAHB said.

Among US regions, builders in the Northeast and West had the biggest gains in confidence in April, with sentiment rising by 4 points in each region to 65 and 49, respectively. Sentiment rose slightly in the Midwest and slipped slightly in the South.

The government will offer a look at residential construction Tuesday when it releases data on March housing starts and building permits. The National Association of Realtors will release data on existing-home sales on Thursday.  

--With assistance from Chris Middleton.

©2024 Bloomberg L.P.