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Sentiment among homebuilders held steady in March, sustaining a rebound from a recent three-year low on improvement in sales and a brighter outlook for the next six months.
The National Association of Home Builders/Wells Fargo Housing Market Index was unchanged at 62, though just below the median estimate for 63 in a Bloomberg survey, data released Monday showed. Readings above 50 indicate more builders view conditions as good than poor.
The stabilization following a December reading that was the weakest since 2015 shows builders are more upbeat amid the most favorable mortgage rates for buyers in more than a year and a historically robust job market. Two of the three subgauges increased, with measures of present sales of single-family homes and the outlook for purchases over the next six months both rising to the highest levels since October.
The upbeat assessments may signal the housing industry is shaking off a series of downbeat reports from across the sector as consumer sentiment improves and the Federal Reserve pledges to remain patient on further interest-rate increases. One negative sign: The subgauge of buyer traffic decreased to 44 from 48, suggesting prospective buyers are still facing barriers to affordability.
Other recent data showed January existing-home sales, which comprise the bulk of the market, were at the slowest pace since 2015, while new-home sales fell to the weakest pace since October. Builders report lower-priced homes are selling well, though affordability still remains a concern as developers confront challenges such as a shortage of skilled workers, lack of buildable lots and zoning restrictions, NAHB said.
“Builders report the market is stabilizing following the slowdown at the end of 2018 and they anticipate a solid spring home buying season,” NAHB Chairman Greg Ugalde, a homebuilder and developer in Connecticut, said in a statement.
Three of four geographic regions improved, led by the Northeast, which rose to 52, the highest since November. The South and West also gained while the Midwest slumped. The Washington-based trade association represents more than 140,000 members in areas ranging from building and subcontracting to design and housing finance.