Builders remained confident in March in the market for newly-built single-family homes.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) held steady at a level of 58. Any number over 50 indicates that more builders view conditions as good than poor.
“Confidence levels are hovering above the 50-point mid-range, indicating that the single-family market continues to make slow but steady progress,” said NAHB Chairman Ed Brady, a home builder. “However, builders continue to report problems regarding a shortage of lots and labor.”
The HMI measures builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The monthly survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index.
The HMI component gauging current sales conditions was steady while the index measuring sales expectations in the next six months fell three points. The component charting buyer traffic was up a touch.
In the three-month moving averages for regional HMI scores, the Midwest was higher, the South was unchanged, and the West posted declines.
“While builder sentiment has been relatively flat for the last few months, the March HMI reading correlates with NAHB’s forecast of a steady firming of the single-family sector in 2016,” said NAHB Chief Economist David Crowe. “Solid job growth, low mortgage rates and improving mortgage availability will help keep the housing market on a gradual upward trajectory in the coming months.”