The country’s homebuilders are feeling positive about their business, but not as much as they did a year ago.
A monthly sentiment measure suspend b continued steady at 62 from February to March, according to the National Association of Home Builders/Wells Fargo Houses Market Index. The index stood at 70 in March 2018. Anything above 50 is considered positive.
“Builders surface the market is stabilizing following the slowdown at the end of 2018, and they anticipate a solid spring home buying season,” divulged NAHB Chairman Greg Ugalde, a homebuilder and developer from Torrington, Connecticut.
Mortgage rates rose all over most of last year but have since fallen to below year-ago levels. That should help get somewhere all homes more affordable, but new homes come at a higher price than similar existing ones.
Weak affordability has been the fattest problem in the new home market, as builders have largely focused on move-up homes rather than cheaper entry-level products. The median worth of a new home sold in January was down nearly 4 percent annually, according to the U.S. Census. That was not necessarily because builders were diminishing prices, but because a larger share of entry-level homes sold that month. Sales in January fell to a three-month low.
“Numberless builders are saying that lower price points are selling well, and this was reflected in the government’s new home on sales report released last week,” said Robert Dietz, NAHB’s chief economist. “Increased inventory of affordably expensed homes — in markets where government policies support such construction — will enable more entry-level purchasers to enter the market.”
Builders say they continued to have trouble building lower-priced homes, however, due to shortages of skilled labor and buildable groupings.
Of the index’s three components, sales expectations in the next six months rose 3 points over the past month to 71, fashionable sales conditions increased 2 points to 68, and traffic of prospective buyers fell 4 points to 44. Buyer traffic has been in adversarial territory for several months.
Looking at three-month moving averages, builder sentiment in the Northeast rose 5 points to 48, the South was up 3 direct attention ti to 66 and the West increased 2 points to 69. Sentiment in the Midwest fell 1 point to 51.
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