Builder confidence in the market for newly-built single-family homes
jumped six points to a level of 71 on the National Association of Home
Builders/Wells Fargo Housing Market Index (HMI). This is the highest
reading since June 2005.
“Builders are buoyed by President Trump’s actions on regulatory
reform, particularly his recent executive order to rescind or revise the
waters of the U.S. rule that impacts permitting,” said NAHB Chairman
Granger MacDonald, a home builder and developer from Kerrville, Texas.
“While builders are clearly confident, we expect some moderation in
the index moving forward,” said NAHB Chief Economist Robert Dietz.
“Builders continue to face a number of challenges, including rising
material prices, higher mortgage rates, and shortages of lots and
labor.”
Derived from a monthly survey that NAHB has been conducting for 30
years, the NAHB/Wells Fargo Housing Market Index 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.
All three HMI components posted robust gains in March. The component
gauging current sales conditions increased seven points to 78 while the
index charting sales expectations in the next six months rose five
points to 78. Meanwhile, the component measuring buyer traffic jumped
eight points to 54.
Looking at the three-month moving averages for regional HMI scores,
the Midwest increased three points to 68 and the South rose one point to
68. The West dipped three points to 76 and the Northeast edged one
point lower to 48.
