The National Association of Home Builders/Wells Fargo Housing Market Index decreased two points to 79 in March.
“While builders continue to report solid buyer traffic numbers, helped by historically low existing home inventory and a persistent housing deficit, increasing development and construction costs have taken a toll on builder confidence,” said NAHB Chairman Jerry Konter. “We call upon policymakers to act now to ease supply-chain woes. Improving access to lumber, OSB and other materials will help builders increase the supply of badly-needed housing and fight inflation.”
“The March HMI recorded the lowest future sales expectations in the survey since June 2020,” said NAHB Chief Economist Robert Dietz. “Builders are reporting growing concerns that increasing construction costs (up 20% over the last 12 months) and expected higher interest rates connected to tightening monetary policy will price prospective home buyers out of the market. While low existing inventory and favorable demographics are supporting demand, the impact of elevated inflation and expected higher interest rates suggests caution for the second half of 2022.”
The HMI component measuring buyer traffic gained two points to 67. The component measuring current sales conditions fell three points to 86, and the component measuring sales expectations in the next sixth months fell ten points to 70.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell seven points to 69, the Midwest dropped one point to 72 and the South fell three points to 83. The West moved up one point to 90.
Read the NAHB release.