(Bloomberg) -- Confidence among U.S. homebuilders improved in April as strong demand helped offset concerns about rising material costs and supply chain issues.

A gauge of builder sentiment rose to 83 from a March reading of 82, the highest in two months, National Association of Home Builders data showed Thursday. The figure was in line with the median forecast in a Bloomberg survey of economists.

The improvement in sentiment indicates more moderate yet still-strong momentum in the housing market even as higher building costs and rising mortgage rates limit faster gains. There aren’t enough homes for sale to meet the demands of buyers who continue to seek more space to work and live during the pandemic.

“Despite strong buyer traffic, builders continue to face challenges to add much needed housing supply to the market,” Chuck Fowke, chairman of the NAHB and a builder in Tampa, Florida, said in a statement. “The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances, and other building materials.”

In signs that demand remains strong, the NAHB measure of prospective homebuyer traffic rose to its highest level since November and an index of current sales also picked up.

The measure of sales expectations in the next six months, however, declined. Confidence measures rose in the South and West and fell in the Northeast and Midwest from the prior month.

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