U.S. Home Builders Index Falls Sharply in March
by:Tom Moeller
|in:Economy in Brief
Summary
- Overall reading is lowest since September.
- Component measures each fall.
- Regional indexes all weaken.
The Housing Market Index, compiled by the National Association of Home Builders/Wells Fargo, fell 7.1% (-23.5% y/y) to 39 in March after declining an unrevised 10.6% to 42 in February. It was well below the break-even point of 50, where it’s been since May. The index remains below a July 2023 high of 56 and a November 2020 peak of 90.
The rate on a 30-year fixed rate mortgage averaged 6.64% in the first two weeks of March versus 6.84% during all of February. It remained below the high of 7.79% in the last week of October 2023, according to Freddie Mac.
The single-family sales measure declined 6.5% (-23.2% y/y) this month to 43 after falling 8.0% to 46 in February. The prospective sales index in six months held steady (-24.2% y/y) at 47 after falling 20.3% in February. It was the lowest level in nine months. The traffic of prospective buyers’ index fell 17.2% (-29.4% y/y) to 24 in March after declining 9.4% in February.
Housing performance weakened across the country during March. The Northeast index fell 6.0% (-23.0% y/y) to 47 after falling 23.1% in February. It was the lowest level since August of last year. In the South, the index weakened 4.9% (-25.0% y/y) to 39 this month after falling 12.8% in February. The index for the Midwest was off 11.6% (-22.4% y/y) to 38 after falling 2.3% in February. The index in the West weakened 2.9% (-24.4% y/y) to 34 after falling 16.7% in February.
The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low." The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. The regional indexes run back to December 2004.
These data are included in Haver's SURVEYS database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
