Builder confidence dropped again in March, according to a National Association of Home Builders (NAHB)/Wells Fargo Market Index report released today.
The index, which measures builders' perceptions of current and future sales conditions, fell two points from February to reach 44 this month. Builder confidence in the market for newly built single-family homes leveled off in January after eight consecutive months of improvement, and has dropped since then, according to the NAHB.
Analysts had expected a one-point increase to 47 for March , which would've brought confidence closer to the 50-point mark, with over 50 indicating optimism outweighs pessimism.
"Although many of our members are reporting increased demand for new homes in their markets, their enthusiasm is being tempered by frustrating bottlenecks in the supply chain for developed lots along with rising costs for building materials and labor," said NAHB Chairman Rick Judson in a statement. "At the same time, problems with appraisals and credit availability remain considerable obstacles to completing deals."
The main dip for March came from homebuilders' perceptions of current sales, not future expectations. Although the current component fell four points to 47, traffic of prospective buyers over the next six months increased three points to 35 and sales expectations for the next six months bumped up one point to 51.