U.S. home builder confidence in the market for new, single-family homes was down slightly for a third month in March. The two-point drop brought the index to 44 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
"Following eight consecutive months of improvement, builder confidence leveled off in January and has since edged down several points," said NAHB Chairman Rick Judson, a home builder from Charlotte, NC. "Although many of our members are reporting increased demand for new homes in their markets, their enthusiasm is being tempered by frustrating bottlenecks in the supply chain for developed lots along with rising costs for building materials and labor. At the same time, problems with appraisals and credit availability remain considerable obstacles to completing deals."
"In addition to tight credit and below-price appraisals, home building is beginning to suffer growth pains as the infrastructure that supports it tries to re-establish itself," explained NAHB Chief Economist David Crowe. "During the Great Recession, the industry lost home building firms, building material production capacity, workers who retreated to other sectors and the pipeline of developed lots. The road to a housing recovery will be a bumpy one until these issues are addressed, but in the meantime, builders are much more optimistic today than they were at this time last year."
The HMI component that measures current sales conditions was down four points, to 47.
The components measuring sales expectations in the next six months was up one point to 51.
The component gauging traffic of prospective buyers gained three points, to 35, in March.
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