The new home market is getting no spring lift whatsoever at least based on the National Association of Home Builder’s housing market index, which missed expectations for the last seven out of eight months, coming in at a lower-than-expected 47.
The index has been stuck below breakeven 50 for three months now, even though it’s the start of the “spring buying season.”
The homebuilder index weakness is centered in traffic, which remains far below 50 at 32.
Details for March once again showed serious weakness in traffic, at 33 versus February’s 31. Weakness in traffic points to lack of participation by first-time homebuyers and the importance of all-cash buyers who have been holding up the housing market, and who are now disappearing.
The official position of NAHB is that there is confidence in future activity, but there’s not a lot to support that. Expectations for tomorrow’s, mortgage applications, housing starts and permit data are no better than flat.
“Builder confidence has been in a holding pattern the past three months,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “Looking ahead, as the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead.”
The housing market index posted a record 10-point loss to 46 in February and hasn’t yet recovered, in what is a bad omen for the housing sector where many are banking on spring strength.