Homebuilder confidence in the U.S. is holding at its highest levels in well over four years, according to a report released by the National Association of Home Builders on Monday, with the group's reading on homebuilder confidence unchanged in March following five straight months of gains.
The report showed that the NAHB/Wells Fargo Housing Market Index came in at 28 in March, unchanged from the downwardly revised reading for February. Economists had expected the index to edge up to 30 from the 29 originally reported for the previous month.
While the index came in below economist estimates, it is still holding at its best level since a matching reading in June of 2007.
Barry Rutenberg, chairman of the NAHB, said, "While builders are still very cautious at this time, there is a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving."
The unchanged reading on homebuilder confidence came as an improvement in expectations was offset by a drop in the assessment of current conditions.
The component gauging sales expectations in the next six months rose to 36 in March from 34 in February, while the component gauging current sales conditions edged down to 29 from 30. The component gauging traffic of prospective buyers held unchanged at 22.
The report also showed that the housing market index for the Northeast rose to 25 in March from 20 in February, while the indexes for the Midwest and the South both rose by two points to 32 and 27, respectively.
On the other hand, the housing market index for the West tumbled to 33 in March from 43 in February after surging up by 22 points in the previous month.
NAHB Chief Economist David Crowe said, "Builder confidence is now twice as strong as it was six months ago, and the West was the only region to experience a decline this month following an unusual spike in February."
"That said, many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in some markets," he added.
Housing data is likely to remain in focus throughout the week, with reports on housing starts and new and existing home sales also due to be released later in the week.
by RTT Staff Writer
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