Builder confidence remained steady in March with the Housing Market Index (HMI) at 62, on a 0-100 scale, after climbing the past two months, according to the National Association of Home Builders (NAHB) and Wells Fargo.
HMI is a weighted average of separate indices for three single-family data points. It asks respondents to rate the market conditions for the sale of new homes at present and in the next six months, as well as the traffic of prospective buyers of new homes. It falls in a range of 0-100.
“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.”
Inventory overall still remains a key concern for builders, according to NAHB. A shortage of skilled workers, combined with lack of buildable lots and stiff zoning restrictions are among the challenges builders face in constructing homes at an affordable price point.
The index pertaining to sales expectations in the next six months rose three points to 71, the index gauging current conditions increased two points to 68 and the index measuring traffic of prospective buyers fell four points to 44.