Housing Market Index: Home Builder Confidence Flat in March

The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released on Tuesday showed homebuilder sentiment remained flat in March. The index was unchanged in March at 58, marking the second month it has remained at its lowest level since May.

Economists surveyed by The Wall Street Journal had expected a reading of 59 in March.

“Confidence levels are hovering above the 50-point mid-range, indicating that the single-family market continues to make slow but steady progress,” said NAHB Chairman Ed Brady. “However, builders continue to report problems regarding a shortage of lots and labor.”

The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” A reading over 50 means most builders generally see conditions as positive.

“While builder sentiment has been relatively flat for the last few months, the March HMI reading correlates with NAHB’s forecast of a steady firming of the single-family sector in 2016,” said NAHB Chief Economist David Crowe. “Solid job growth, low mortgage rates and improving mortgage availability will help keep the housing market on a gradual upward trajectory in the coming months.”

The HMI component gauging current sales conditions held steady at 65 in March while the index measuring sales expectations in the next six months fell three points to 61. The component charting buyer traffic rose four points to 43.