The National Association of Home Builders (NAHB)/Wells Fargo housing market index for March remained unchanged month over month at 62. The February index had gained four points month over month, after gaining two points in January to climb back from a reading of 56 in December. Economists polled by Bloomberg were expecting a reading of 63.
Builders see indications that the market for new homes is stabilizing and are looking for a good spring home-buying season. Affordability is still a problem, as are a shortage of skilled workers, fewer buildable lots and tough zoning restrictions in many major metro areas.
The index is based on an NAHB monthly survey of homebuilder perceptions of current single-family home sales and expectations for sale in the next six months. An index reading above 50 indicates that more builders view sales conditions as good than view them as poor.
The current sales conditions subindex for March rose by two points to 68, and the subindex that estimates prospective buyer traffic dropped by four points to 44. The subindex measuring sales expectations for the next six months rose by three points from 68 to 71.
NAHB Chief Economist Robert Dietz noted:
In a healthy sign for the housing market, more builders are saying that lower price points are selling well, and this was reflected in the government’s new home sales report released last week. Increased inventory of affordably priced homes – in markets where government policies support such construction – will enable more entry-level buyers to enter the market.
In the NAHB’s regions, three-month moving average indexes rose in three of four regions. The Northeast index score increased by five points to 48. The average index rose by three points to 66 in the South and by two points in the West to 69. The Midwest index declined by a point to 51.