Home builder sentiment fell this month amid economic uncertainty, tariffs and higher-than-average construction costs, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
Builder confidence in the market for newly single-family homes fell three points in March to a seven-month low of 39. Any reading under 50 indicates negative sentiments. The index tracking current sales conditions dropped three points to 43, its lowest reading since December 2023. The gauge measuring traffic of prospective buyers fell five points to 24 while the component tracking sales expectations in the next six months remained at 47.
Builders are optimistic that a less strenuous-regulatory environment under the Trump administration will enable improved business conditions. Twenty nine percent of builders cut home prices this month, up from 26 percent in February.
“Builders continue to face elevated building material costs that are exacerbated by tariff issues, as well as other supply-side challenges that include labor and lot shortages,” said NAHB Chair Buddy Hughes.
Privately-owned housing units greenlighted by building permits fell 1.2 percent to 1.45 million from 1.47 million in January, according to the Census Bureau and the Department of Housing and Urban Development. Single-family authorizations fell 0.2 percent to 992,000 from 994,000 in January.
Other February report findings included:
- Privately-owned housing starts increased 11.2 percent to 1.5 million from 1.35 million in January. Single-family housing starts increased 11.4 percent to 1.1 million from 995,000 in January.
- Privately-owned housing completions fell 4 percent to 1.59 million from 1.65 million in January. Single-family housing completions increased 7.1 percent to 1.06 million from 995,000 in January.