The latest National Association of Home Builders/Wells Fargo Housing Market Index was down 1 percentage point in March from February, to a reading of 70.
“A strong labor market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise,” said NAHB Chief Economist Robert Dietz. “With these economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead.”
The component of the index that tracks builder sentiment for the current sales market was steady at 77 this month, but the outlook for the next 6 months was weaker by two points to 78. The buyer traffic metric slipped 3 points to 51.
Optimism remains highest for the West (down 2 points to 79), followed by the South (down 1 point to 73), the Midwest (down 4 points to 68), and the Northeast (up 1 point to 57).
“Builders’ optimism continues to be fueled by growing consumer demand for housing and confidence in the market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, builders are reporting challenges in finding buildable lots, which could limit their ability to meet this demand.”