Builder Confidence Steady in March

By Mark Lieberman

Managing Director and Senior Economist

Data Highlights:

  • Housing Market Index REMAINED at 62 (out of 100) in March, unchanged from February;
  • Two of the three index component measures ROSE; only the measure of buyer traffic declined, dropping four points to a reading of 44;
  • By region, builder confidence FELL in the Midwest but improved in the three other Census Regions;


  • Forecast for home sales six months out continued to exceed the forecast for sales in the next month
  • After slipping at the end of 2018. The overall confidence index is now at its highest level since October;
  • The index has been positive (i.e. over 50) for 57 straight months

Data Source: National Association of Home Builders

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In January, according to the latest data from the Census Bureau and Department of Housing and Urban Development (HUD), the pace of contracts for sale for new single-family homes fell for the first time in four months – a decline of 45,000 or 6.9 percent. But that report – arriving about am month late due to the partial government shutdown – failed to dampen builder confidence for March.

But the report on sales activity for February – due to be reported March 29 – could, if equally disappointing, could.

Until then, builders continue to operate as if new-home sales, if not robust, remain strong despite evidence to the contrary.

As we saw in a different Census Bureau report last week – on retail sales – the home sales data do not exist in a vacuum. With weaker new homes sales, retail activity at furniture and at electronics-appliance stores – was off in February.

The National Association of Relators’ Housing Affordability Index — which attempts to measure the degree to which a typical family can afford the monthly mortgage payments on a typical home – has been increasing steadily from 144.13 last November to 155.8 in January. At that level a family earning the median family income has 155% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home.

That index is based on the median price of an existing single family home; the median price of a new single family home in January was almost 30 percent higher however.

The average interest rate on a 30-year fixed rate mortgage dropped to 4,46 percent in January from 4.64 percent in December, according to Freddie Mac.

 Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am Eastern Time. Follow Mark Lieberman on Twitter at @ foxeconomics.

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