The Housing Market Index fell 2 points to 82 in March, according to the National Association of Home Builders press release. The index was weighed down by rising interest rates and costs for materials, especially lumber.
The builders’ index in March 2021 is higher than 72 recorded in March 2020 but below a record high of 90 in November.
- Supply shortages and high demand caused lumber prices to rise by about 200% since last April, causing a slump in homebuilder confidence.
- Despite the slump in homebuilder confidence, it remains above 50, the mark which is considered a positive sentiment.
- Of the index’s three components, current sales conditions fell 3 points to 87
- Sales expectations in the next six months rose 3 points to 83, while buyer traffic remained unchanged at 72.
- A low supply of homes for sale has seen prices for existing and newly built homes rise quickly.
- On a three-month moving average, builder sentiment in the Northeast rose 2 points to 80 and fell by 1 point to 80 in Midwest.
- The builder sentiment declined by 2 points to 82 in the South, while in the West, it shed 3 points to 90.
SPDR Homebuilders ETF is currently declining. XHB is down 0.58%