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Builder Confidence Levels in March

After falling in February to the lowest level in nearly a year, builder confidence barely moved in March, the National Association of Home Builders (NAHB) revealed in its latest Housing Market Index (HMI).

According to the group, the index nudged up one point this month, landing on a reading of 47—still a few points shy of the 50 benchmark that separates a market largely perceived as “bad” from one perceived as “good.”

“The March HMI mirrors last month’s sentiment, as builders continued to be affected by poor weather and difficulties in finding lots and labor,” explained NAHB chairman Kevin Kelly.

Released in partnership with Wells Fargo, the monthly index gauges builder perceptions of current single-family home sales and sales expectations for the next six months. Respondents are also asked to rate traffic of prospective buyers.

Attitudes were mixed across all components in the latest survey. The national index reading for current single-family home sales rose one point to 52, while the measure of sales expectations retreated a point to 53. Meanwhile, prospective buyer traffic moved up slightly to 33 after experiencing a nine-point plunge in February.

David Crowe, NAHB’s chief economist, said the March survey results reflect builders’ worries about meeting demand for the imminent spring buying season.

“These [worries] include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale,” Crowe said.

Accounting for seasonal adjustments, all four regional indices posted monthly declines, with the South posting the greatest drop: four points to a reading of 49. The Northeast and Midwest each saw three-point decreases month-over-month, coming in at readings of 35 and 53, respectively, while the West reported a two-point decrease to 61.

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