Builders' confidence in the market for new single-family homes grew as the National Association of Home Builders' housing market index — a monthly gauge of builder sentiment — rose to 47 in March from 46 in February.
"The March HMI mirrors last month's sentiment, as builders continued to be affected by poor weather and difficulties in finding lots and labor," according to NAHB Chairman Kevin Kelly.
"A number of factors are raising builder concerns over meeting demand for the spring buying season," said NAHB Chief Economist David Crowe. "These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale."
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
The current single-family home sales index gained to 52 from 51, the sales expectations index for the next six months dropped to 53 from 54; and the traffic of prospective buyers index rose to 33 from 31.
Economists polled by Thomson Reuters predicted the index would be 50.
