Mortgage applications for new homes dropped in April according to a report released yesterday by the Mortgage Bankers of America (MBA). At the same time, homebuilder confidence remains very high according to a report released by the National Association of Home Builders (NAHB).

The MBA reports mortgage applications for new home purchases decreased 4.3 percent between April 2016 and April 2017. Compared to March 2017, applications decreased by 20 percent relative to the previous month. The change does not include any adjustment for typical seasonal patterns.

“For the first time this year, mortgage applications for new homes in April were lower than the same month a year ago. Mortgage applications for new homes fell more than 20 percent in April after peaking in March, as they have the past 2 years,” Lynn Fisher, MBA’s vice president of research and economics, said in a statement. “A relatively strong March may have pulled forward some applications from April, exacerbating the normal seasonal fall-off. On net, year to date applications for new homes are running about 3 percent above the same period from 2016. Despite steady demand for housing, homebuilders continue to face rising costs for labor and materials which will continue to moderate the pace of building.”

The NAHB reports that builder confidence in the market for newly-built single-family homes rose two points in May to a level of 70 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the second highest HMI reading since the downturn.

“This report shows that builders’ optimism in the housing market is solidifying, even as they deal with higher building material costs and shortages of lots and labor,” NAHB Chairman Granger MacDonald, a Texas home builder and developer, said in a statement.