Home Builders Remain Concerned about Spring Market

Builderrnconfidence as measured by the National Association of Home Builders (NAHB)/WellsrnFargo Housing Market Index (HMI) remained flat in March, rising only 1 point torn47 from February’s level.  The threerncomponents of the index also changed only slightly although the directions werernmixed.  </p

NAHB Chairman Kevin Kelly said, “ThernMarch HMI mirrors last month’s sentiment, as builders continued to be affectedrnby poor weather and difficulties in finding lots and labor.” </p

“A number of factors are raisingrnbuilder concerns over meeting demand for the spring buying season,” accordingrnto the association’s Chief Economist David Crowe. “These include arnshortage of buildable lots and skilled workers, rising materials prices and anrnextremely low inventory of new homes for sale.”</p

NAHB constructs the HMI from results ofrna survey it conducts monthly among its homebuilder-members.  Respondents are asked to give theirrnperceptions of current single-family home sales and expectations for thosernsales over the next six months as “good,” “fair” orrn”poor.” The survey also asks builders to rate traffic of prospectivernbuyers as “high to very high,” “average” or “low tornvery low.”   Each set of responsesrnas well as the composite are used to calculate seasonally adjusted indices wherernany number over 50 indicates that more builders view conditions as good thanrnpoor.<br /<br /The component gauging current sales conditions rose one point to 52 and therncomponent measuring buyer traffic increased two points to 33. The componentrngauging sales expectations in the next six months fell one point to 53, its lowest level since May 2013.<br /<br /Regional scores are computed as three-month moving averages and those averages forrnall four regions were down.  ThernNortheast dropped three points to 35, the Midwest three points to 53, the Southrnposted a four-point decline to 49 and the West registered a two-point drop torn61.

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