U.S. Home Builders Sentiment Strengthens in March
by:Tom Moeller
|in:Economy in Brief
Summary
- Overall index moves to highest level since July 2023.
- All three components advance.
- Regional indexes are mixed.
The Housing Market Index compiled by the National Association of Home Builders/Wells Fargo increased 6.3% (15.9% y/y) in March to 51, up for the fourth consecutive month. It was the first time the index surpassed the break-even point of 50 since last July. Looking back, the index peaked at 90 in November 2020.
The average rate on a 30-year fixed rate mortgage fell to 6.74% last week from a high of 7.79% in the last week of October, according to Freddie Mac.
The single-family sales measure rose 7.7% (14.3% y/y) to 56 from 52 in February. It was the highest reading since August 2023. The prospective sales in six months figure rose 6.3% (31.9% y/y) to 62 from 60. The traffic of prospective buyers’ index increased 6.3% (9.7% y/y) to 34 in March from 32 in February. The reading remained below the November 2020 high of 77.
Housing performance across the country was mixed in March. In the Northeast, the index eased 1.6% (+32.6% y/y) to 61 from 62. The index remained above the December 2022 low of 32. In other regions of the country, the index for the Midwest rose 28.9% (36.1% y/y) to 49 from 38 in February. In the South, the index rose 4.0% to 62 (4.0% y/y) from 50, but stayed below the high of 90 in November 2020. The index in the West fell 4.3% (+25.0% y/y) to 45 from 47 in February.
The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low." The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. The regional indexes run back to December 2004.
These data are included in Haver's SURVEYS database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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