The March NAHB/Wells Fargo Housing Market Index held roughly the same at 47, which is up one point from the unrevised February level of 46. The past two months have the same message: unusually cold and wet weather over much of the US combined with increasing concern among builders that the supply chain cannot keep up with the expected spring rebound.
Weather continued to limit builders and buyers ability to get to construction sites. At the same time, the continued limited supply of buildable lots and skilled labor has held back builders’ ability to resupply a very low inventory of new homes for sale. The January months’ supply of new homes dipped below 5 months and the absolute level remained at 184,000 compared to an average of 320,000 throughout 1990 and early 2000s.
HMI components were mixed with current sales index up one point to 52 and traffic up two points to 33. Expectations for the next six months dropped one point to 53. Regional indexes reflected the degree of weather disruption with the three month moving average down four points in the South, three points in the Northeast and Midwest and two points in the West.
Builders’ comments continued to concentrate on the unusual weather with greater frequency in the March report than the February report. The most mentioned supply chain problem continues to be lot availability followed by labor supply and cost.