The National Association of Homebuilders (NAHB) informed on Wednesday
its housing market index (HMI) climbed to 44 in March from an unrevised February reading of 42. This was the highest reading since September 2022 (46).
Economists had anticipated the HMI to drop to 40.
A reading over 50 indicates more builders view conditions as good than
Two of three of the major HMI components
showed increases in early March. The component measuring traffic of prospective
buyers jumped 3 points to 31, while the component tracking current sales
conditions increased 2 points to 49.
At the same
time, the component charting sales expectations in the next six months decreased
1 point to 47.
Commenting on the latest report, NAHB Chairman Alicia Huey said that builders
continued to report strong pent-up demand as buyers were waiting for interest
rates to drop and turning more to the new home market due to a shortage of
existing inventory. “But given recent instability concerns in the banking
system and volatility in interest rates, builders are highly uncertain about the
near- and medium-term outlook,” she added.
Meanwhile, NAHB Chief Economist Robert Dietz noted that while financial
system stress had recently reduced long-term interest rates, which would help housing
demand in the coming weeks, the cost and availability of housing inventory
remained a critical constraint for prospective home buyers.