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;

Trends:

  • 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

Image result for housing market index


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.

0 Responses to “Builder Confidence Steady in March”


  • No Comments

Leave a Reply