The National Association of Homebuilders (NAHB) reports builder confidence for new, single-family homes fell two points in March in the last NAHB/Wells Fargo Housing Market Index (HMI).
Sentiment levels have remained in the 70s for the past six months, according to the HMI.
“Builder confidence remains solid, although sales expectations for the next six months dropped four points on economic uncertainty stemming from the coronavirus. Interest rates remain low, and a lack of inventory creates market opportunities for single-family builders. However, down payment requirements are a limiting factor amid lower mortgage interest rates,” the HMI states.
However, the NAHB reports responses for the most recent HMI were collected prior to March 4. Response to recent stock market declines and rising economic impact will be reflected in the next HMI.
Twenty-one percent of builders in the HMI reported some disruption in supply due to COVID-19 concerns in countries such as China. The HMI is 33% among builders who responded to this survey after March 6.
Additionally, the HMI index following current sales conditions fell two points to 70, the index measuring sales expectations in the six months fell four points to 75, and the gauge charting traffic or prospective buyers also fell, dropping just one point to 56.
These changes include stopping open houses, requiring potential buyers to wash their hands and use hand sanitizers, and asking buyers to remove shoes or wear footies.
The share of sellers adopting these changes, and more, rose to 44% and 34%, respectively, in Washington and California
NAR’s survey—conducted March 9-10—discussed the coronavirus and how it has impacted buyers and seller interest and behavior.
According to the survey, 37% said lower mortgage rates bring more optimism to buyers than stock market correction. Also, 78% of buyers said there has been no change in buyer interest due to COVID-19.