NAHB’s monthly Housing Market Index, based on surveys of single-family builders, fell by a record amount in March. Indeed, builders’ assessments of buyer traffic, current sales and prospective sales all deteriorated markedly. Builders cited unusually bad weather as well as buyer hesitancy stemming from deepening uncertainties about the economy, the situation in Iraq and the prospects for domestic terrorism. Soaring costs for gasoline, natural gas and heating oil certainly contributed to the concerns of prospective buyers.
The fundamentals of the single-family housing market are still intact, and the outlook for mortgage rates is excellent. Thus, a return to normal weather and a rebound in consumer confidence (and the economy) are likely to restore recently lost market activity and pave the way for excellent numbers down the line. While the quarterly pattern of housing market activity has been affected, the projected totals for 2003 have not been lowered. We still expect 2003 to be quite close to the excellent performance of last year.