Tuesday, February 27, 2024
HomehousingHome builders still cold on spring market

Home builders still cold on spring market

Confidence among the nation's home builders edged up slightly in March but is still mired in the negative, way down from recent highs.

After plummeting 10 points in February, a monthly sentiment index from the National Association of Home Builders (HMI) rose just 1 point to 47. The line between positive and negative sentiment is 50 on the survey.

"The March HMI mirrors last month's sentiment, as builders continued to be affected by poor weather and difficulties in finding lots and labor," said NAHB Chairman Kevin Kelly, a home builder from Wilmington, Del.

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Of the three index components, builder perceptions of current single-family home sales conditions rose 1 point to 52. Buyer traffic increased 2 points but is still lagging at 33. Sales expectations over the next six months fell 1 point to 53.

"A number of factors are raising builder concerns over meeting demand for the spring buying season," said NAHB Chief Economist David Crowe. "These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale."

Another recent survey by the NAHB found building material costs and labor availability to be the top two concerns among the nation's builders, up dramatically from even last year.

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Regionally, on a three-month running average, sentiment fell across the nation. The Northeast dropped 3 points to 35, the Midwest was down the same to 53. The South saw a 4-point drop to 49 and the West fell 2 points to 61.

Rough weather, while still a factor today in the Mid-Atlantic, had less of an impact on builders so far in March but has certainly left its mark on the season so far. Home builder K. Hovnanian reported a "softening" in its fiscal first quarter, based on poor weather conditions. Both Lennar and KB Home are set to report earnings this week.

By CNBC's Diana Olick. Follow her on Twitter @Diana_Olick.

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