WASHINGTON – Builder confidence in the market for newly built single-family homes remained unchanged in March as economic woes continued to take their toll on potential buyers, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The HMI held steady at 9 in March, marking a fifth consecutive month of single-digit readings.
"Home builders are hopeful that the recent economic stimulus package, and particularly the first-time home buyer tax credit that it included, will have a positive impact on consumer behavior and home sales as the prime home buying season gets underway," said NAHB Chairman Joe Robson, a homebuilder from Tulsa, OK. "But it's still too soon to tell how much of an impact that will be, especially as builders find potential buyers are reluctant because of uncertainty about their future job security and the overall economic outlook."
"The economy continues to be the main drag on home sales activity right now, in terms of consumer confidence across most of the country," acknowledged NAHB Chief Economist David Crowe. "What's more, home builders report that tight credit conditions are posing a further hurdle, especially for potential first-time buyers, while potential trade-up buyers are finding it very tough to sell their existing homes so they can make a move."
Two out of three of the HMI's component indexes were unchanged in March, with the index gauging current sales conditions holding at 7 and the index gauging sales expectations in the next six months holding at a record-low 15. Meanwhile, the index gauging traffic of prospective buyers declined two points to 9.
Three out of four regions saw no change in their HMI reading in March. The Midwest, South and West each held at near-record lows of 8, 12, and 5, respectively. The Northeast rose a single point from a record low of 8 in February to 9 in March.
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