Builder confidence remained steady in March, according to the latest National Association of Home Builders (NAHB)-Wells Fargo Housing Market Index report released Monday.
A rating below 50 signals builders view sales conditions as poor — the index stood at 9 for March — it was the fifth straight month the overall index has held steady. The index hit a record low at 8 in January.
The 20-year-old index has been in single-digit territory since November — it averaged 72 during 2005.
The index gauges current builder sentiment in the market for newly built single-family homes from a set of survey questions. The survey focuses on buyer traffic, current sales conditions, and sales expectations for the next six months.
The index component gauging current sales conditions held at 7 in March, and the component gauging builders’ sales expectations for the next six months held at 15. The component that focuses on buyer traffic dropped from 11 in February to 9 in March.
The results of another survey, released by John Burns Real Estate Consulting, found that builders are divided on whether a new $8,000 tax credit for first-time buyers (see Inman News article) will directly result in additional sales: 54 percent said they would not receive any new sales as a result, while 46 percent said they expected one to five sales per community in March as a result.
The March survey is based on responses from 218 builder executives from across the country who represent about 1,600 new-home communities in 80 metro areas. …CONTINUED
This survey also measured sentiment about market conditions on a scale ranging from zero ("poor") to 10 ("good"), with 5 indicating conditions are "fair."
Asked to rate current sales in a given metro area, the national average was 2 — which is up from 1.5 in February, 1 in January and 0.5 in December. Sales are typically lowest during the winter months and highest during spring.
Traffic of prospective buyers, meanwhile, declined from a score of 2.5 in February to 2 in March, while sales expectations for single-family, detached new homes rose from 2 in February to 2.5 in March.
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