NAHB: Builder Confidence Inches Higher in March

by Peter Thomas Ricci

Builder confidence stabilized in March after experiencing its worst month in sometime in February.

After a horrid month that saw builder confidence fall to its lowest level in 12 months, the NAHB’s Housing Market Index stabilized in March.

The chief measure of builder sentiment in the market for newly built single-family homes, the Housing Market Index currently stands at 47, a one-point increase from February’s 46; unfortunately, that gain still puts the index below the magical mark of 50, the point at which more builders see conditions as good than bad.

A Stable Month for Builder Confidence

Some of particulars in this month’s Housing Market Index included:

  • The component of the index measuring current sales conditions rose one point to 52.
  • Meanwhile, the component measuring sales expectations for the next six months fell one point, though the buyer traffic component increased two points to 33.
  • Interestingly, the index declined for all the nation’s regions, falling three points in the Northeast (to 35), three points in the Midwest (to 53), four points in the South (to 49) and two points in the West (to 61).

Inventory and Materials Concerns Subsist

David Crowe, the NAHB’s chief economist, said a number of concerns still linger for builders, heading into the spring homebuying season.

“A number of factors are raising builder concerns over meeting demand for the spring buying season,” Crowe said. “These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale.”

See our graph below for a measure of the Housing Market Index’s progress the last few years, up through 2014’s three releases:

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