Demand for newly built single-family homes is holding steady at a healthy level in March, according to builders surveyed for the National Association of Home Builders’ latest Housing Market Index, released today. The HMI remained unchanged this month from February’s 64 reading.
Two out of three of the HMI’s component indexes slipped in March. The index gauging current sales of new single-family homes fell two points to 69, while the index gauging sales expectations for the next six months declined three points to 70. Meanwhile, the index gauging traffic of prospective buyers rose two points to 48, indicating some slight improvement in the flow of visitors to model homes over the last month.
“Highly favorable financing conditions, solid house-price performance and excellent demographics continue to drive the new-homes marketplace. Builders evidently are deriving confidence from these developments and registering realistic expectations for the future,” NAHB Chief Economist David Seiders concurred. He also noted, “A gradual downward drift has occurred in the HMI from its highs of late 2003, in tandem with ongoing concerns about the job market and lower consumer confidence readings.”
The HMI is derived from a monthly survey of builders that NAHB has been conducting for the last 19 years. Home builders are asked to rate current sales of single-family homes as “good,” “fair” or “poor.” They are also asked to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for responses to each component are used to calculate a seasonally adjusted index, where any number over 50 indicates that more builders view sales conditions as good than poor.
The National Association of Home Builders is a Washington-based trade association representing more than 215,000 members involved in residential and light commercial construction.
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