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Home builder confidence unshaken in March

After months of improvement in builder confidence levels, home builder sentiment is unchanged in March on a national level, but regionally, one area experienced a dramatic swing last month, followed by another this month.

Home builder confidence unchanged

Holding at its highest level since June of 2007 after five consecutive months of gains, home builders’ confidence in the market for newly built, single-family homes was unchanged in March, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“While builders are still very cautious at this time, there is a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Florida. “This is demonstrated by the fact that the HMI component measuring builder expectations continued climbing for a sixth straight month in March, to its highest level in more than four years.”

Sales conditions

The only component that dropped in March were builders’ confidence in current sales conditions which fell one point, while the component gauging sales expectations in the next six months increased two points.

Builders’ confidence in the traffic of prospective buyers remains unchanged.

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Regional performance

In March, builder confidence rose 5.0 points in the Northeast, 2.0 points in the Midwest, and 2.0 points in the South.

The West region, however, is experiencing more of a roller coaster – after a 22 point gain in February, the region fell 10 points in March, revealing a rapid shift in sentiment.

Tight credit continues to loom

“Builder confidence is now twice as strong as it was six months ago, and the West was the only region to experience a decline this month following an unusual spike in February,” observed NAHB Chief Economist Dr. David Crowe. “That said, many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in some markets.”

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Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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