U.S. homebuilder confidence fell for the fourth straight month in April as rising mortgage rates, rising home prices and high construction costs weighed on builder confidence and affordability housing.

The National Association of Home Builders’ housing market index fell two points to 77 in April, in line with economists’ forecasts, according to a Refinitiv poll.

The index sits slightly above levels reached in the months before the start of the pandemic, but below an all-time high of 90 in November 2020. The gauge remains well above 50, a reading above above which more builders rate conditions as good rather than poor.

Still, homebuilder confidence has waned in recent months and demand for new homes has weakened, thanks in part to rising interest rates.

Mortgage rates recently hit 5%, the highest level in more than a decade, as the Federal Reserve looks set to continue to tighten monetary policy this year. Combined with house prices that have risen during the pandemic as monetary policy has remained very loose to support an economic recovery, housing affordability is becoming increasingly out of reach for many American buyers.

Supply chain issues continue to drive up production costs, posing a problem not only for builders, but also for homebuyers who face higher mortgage rates and soaring home prices .

“Despite the existing low inventory, builders are reporting that sales traffic and current selling conditions have fallen to their lowest points since last summer, as a sharp rise in mortgage rates and continued disruptions in the supply chain continue to disrupt the housing market,” said NAHB President Jerry Konter. .

A regional breakdown showed the NAHB index rose in the South and Northeast but fell in the Midwest and West.