Despite affordability and labor concerns, homebuilder confidence held steady at 62 points in March, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
“Builders report the market is stabilizing following the slowdown at the end of 2018 and they anticipate a solid spring home buying season," NAHB Chairman Greg Ugalde said.
In March, the index measuring current sales conditions rose from 66 to 68 points, while buyer traffic declined from 48 to 44. Lastly, expectations over the next six months rose from 68 to 71 points.
The three-month moving averages for regional HMI scores show the Northeast rose five points from 43 to 48 points, the South also moved forward from 63 to 66, the West inched forward from 67 to 69 points and the Midwest slid one point backwards from 52 to 51 points.
"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," NAHB Chief Economist Robert Dietz said. "Increased inventory of affordably priced homes – in markets where government policies support such construction – will enable more entry-level buyers to enter the market."
That being said, the report also warns that affordability continues to remain a key concern for builders.
“The skilled worker shortage, lack of buildable lots and stiff zoning restrictions in many major metro markets are among the challenges builders face as they strive to construct homes that can sell at affordable price points,” the report states.
NOTE: The NAHB/Wells Fargo Housing Market Index gauges builder opinions of single-family home sales and expectations, asking for a rating of good, fair or poor. Builders are also asked to rate prospective buyer traffic from very low to very high. The scores are used to calculate a seasonally adjusted index with a rating of 50 or over indicating positive sentiment.
