Tuesday, March 15, 2016

NAHB: Builder Confidence unchanged at 58 in March

by Bill McBride on 3/15/2016 10:05:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 58 in March, unchanged from 58 in February. Any number above 50 indicates that more builders view sales conditions as good than poor.

From the NAHB: Builder Confidence Holds Steady in March

uilder confidence in the market for newly-built single-family homes was unchanged in March at a level of 58 on the NAHB/Wells Fargo Housing Market Index (HMI).

“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.

“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.

Looking at the three-month moving averages for regional HMI scores, the Midwest posted a one-point gain to 58 while the South was unchanged at 59. The West registered a three-point decline to 69 while the Northeast fell one point to 46.
emphasis added
HMI and Starts Correlation Click on graph for larger image.

This graph show the NAHB index since Jan 1985.

This was below the consensus forecast of 59, but still a strong reading.