With buyers uncertain about their own financial futures, builders’ assessment of the housing market held steady in March with a reading of 9, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today.
The monthly index measures builders’ confidence in the housing market; the overall reading has remained in the single digits for five months straight. Two of the index’s individual components--current sales conditions and sales expectations for the next six months--also were unchanged, with readings of 7 and 15, respectively.
The index’s third component, buyer traffic, fell to a reading of 9, which represents a decline of 2 points compared to the previous month.
Unfortunately for builders, the poor March HMI numbers reflect the ongoing weakness in the larger economy.
“The economy continues to be the main drag on home sales activity right now, in terms of consumer confidence across most of the country,” said David Crowe, the NAHB’s chief economist. “What’s more, home builders report that tight credit conditions are posing a further hurdle, especially for potential first-time buyers, while potential trade-up buyers are finding it very tough to sell their existing homes so they can make a move.”
Alison Rice is senior editor, online, at BUILDER magazine.