March Finds No Loss in Builder Confidence
A modest increase in home mortgage rates over the past month hasn’t dampened builder confidence in the strength of the market for new single-family homes, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), which was released on March 15. The index remained unchanged this month from an upwardly revised level of 69 in February. “Robust buyer demand continues to sustain the new-home market, with no sign of letting up in the near future,” said NAHB President Dave Wilson. “Many builders are solidly optimistic about their prospects in coming months.” “Builders have good reason for confidence even as interest rates gravitate upward,” agreed NAHB Chief Economist David Seiders. “Demand for new homes still exceeds supply in many markets, while financing conditions remain quite favorable and jobs and incomes are on the rise.” The average interest rate on long-term mortgages rose about 25 basis points between the February and March HMI survey periods. Derived from a monthly survey that NAHB has been conducting for nearly 20 years, the index asks builders for their assessments of current single-family sales, prospects for sales in the next six-months and the traffic of prospective buyers. Any number over 50 indicates that more builders view sales conditions as good than poor. HMI readings this month for both current and future sales remained unchanged from revised February levels of 76 and 79, respectively, while the component of the index gauging buyer traffic edged up by a single point to 51. “The fact that the HMI has remained at such a high level and within the same two-point range throughout the past six months is a reflection of the ongoing stability and strength of the nation’s housing market,” said Seiders. On a regional basis, the index rose six points to 74 in the Northeast and four points to 83 in the West. The South recorded a one-point decline to 73, and the Midwest, where the job market remains relatively weak, declined two points to 53.
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