Builder Sentiment Unchanged for 3rd Straight Month

Builder confidence in the market for newly-built single-family homes held steady for the third straight month going into the spring home buying season, the National Association of Home Builders said yesterday.

The NAHB/Wells Fargo Housing Market Index remained unchanged at 58 in April. The HMI components measuring sales expectations in the next six months rose by one point to 62, while the index gauging buyer traffic also rose by one point to 44. The component charting current sales conditions fell by two points to 63.

All four regions posted declines. The Northeast and West each fell two points to 44 and 67, respectively. Meanwhile, the Midwest and South each posted respective one-point losses to 57 and 58.

Despite the regional losses, overall confidence holds steady, said NAHB Chairman Ed Brady. “The single-family housing sector continues to recover at a slow but consistent pace,” he said. “As we enter the spring home buying season, we should see the market move forward.”

Any number above 50 indicates that more builders view conditions as good than poor.

Last week, the Mortgage Bankers Association’s Builder Application Survey reported mortgage applications for new home purchases increased by 17 percent from February. MBA estimated new single-family home sales ran at a seasonally adjusted annual rate of 574,000 units in March, an increase of 5.5 percent from February (544,000 units). On an unadjusted basis, MBA estimated 54,000 new home sales in March, an increase of 14.9 percent from 47,000 new home sales in February.

“The slight rise in new home inventory has likely provided some relief for buyer traffic, which rose 1 point in April, as the number of new homes available for sale has picked up modestly,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “Low mortgage rates and solid labor market conditions should provide a boost to home sales this spring.”