Confidence levels of builders of newly built single-family homes remained high in March, though it remains to be seen what impact the latest market turmoil will have going forward, according to a report released Tuesday by the National Association of Home Builders.
Builder confidence dropped two points to 72 in March, the latest NAHB/Wells Fargo Housing Market Index (HMI) showed. Confidence levels have held steady in the low- to mid-70s for the past six months.
“Builder confidence remains solid, although sales expectations for the next six months dropped four points on economic uncertainty stemming from the coronavirus,” NAHB Chairman Dean Mon said. “Interest rates remain low, and a lack of inventory creates market opportunities for single-family builders.”
The HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “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 conditions as good than poor.
“It is important to note that half of the builder responses in the March HMI were collected prior to March 4, so the recent stock market declines and the rising economic impact of the coronavirus will be reflected more in next month’s report,” NAHB Chief Economist Robert Dietz said.
Read the full report here.