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U.S. Homebuilder Confidence Drops To Eight-Month Low In March

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Homebuilder confidence in the U.S. has unexpectedly deteriorated in the month of March, according to a report released by the National Association of Home Builders on Monday.

The report said the NAHB/Wells Fargo Housing Market Index fell to 53 in March from 55 in February. The drop surprised economists, who had expected the index to inch up to 56.

With the unexpected decrease, the housing market index fell to its lowest level since hitting a matching reading last July.

NAHB Chief Economist David Crowe said, "The drop in builder confidence is largely attributable to supply chain issues, such as lot and labor shortages as well as tight underwriting standards."

"These obstacles notwithstanding, we are expecting solid gains in the housing market this year, buoyed by sustained job growth, low mortgage interest rates and pent-up demand," he added.

The report showed that the component gauging current sales conditions fell to 58 in March from 61 in February, while the component measuring buyer traffic dropped to 37 from 39.

On the other hand, the NAHB said the gauge charting sales expectations in the next six months held steady at 59.

The Commerce Department is scheduled to release a separate report on new residential construction in the month of February on Tuesday.

Economists expect housing starts to drop to an annual rate of 1.048 million in February after sliding to a rate of 1.065 million in January.

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