The National Association of Home Builders (NAHB) reported on Tuesday that the US Home Builder Confidence Index has risen for the third consecutive month in March. The index increased by two points to 44, up from the previous month’s reading of 42.
The rise in the index was up due to an increase in the current sales status index, which measures the current sales conditions for newly built, single-family homes. However, the index measuring expectations for sales in the next six months declined, suggesting that builders are concerned about future demand.
Despite the increase, the index remains below the key threshold of 50, which indicates that more builders view conditions as poor than good. The NAHB cited ongoing challenges such as rising material costs, supply chain disruptions, and a shortage of skilled labor as contributing factors to the negative outlook.
“Builders remain cautious about the housing market due to supply-side challenges and regulatory risks,” said Chuck Fowke, NAHB Chairman. “However, as the economy reopens, I anticipate builder confidence will improve in the coming months.”
The NAHB/Wells Fargo Housing Market Index is based on a monthly survey that gauges builder perceptions of current single-family home sales and sales expectations for the next six months. Scores above 50 indicate that more builders view conditions as good than poor, while a score below 50 indicates the opposite.