Builders feel better but traffic still slow and lumber prices again on the move

The March NAHB home builder sentiment index got back above 50 at 51, up from 48 in February and where the estimate was for no change. That’s the best since last July. While builders feel better, Prospective Buyers Traffic remains very low at 34, well below 50, though up 2 pts m/o/m and why discounting is still prevalent. The Present Situation was up 4 pts m/o/m and Expectations were higher by 2 pts to 62.

The NAHB’s bottom line was this, “A lack of existing inventory that continues to drive buyers to new home construction, coupled with strong demand and mortgage rates below last fall’s cycle peak helped push builder sentiment above a key marker in March.” The NAHB also talked about the supply side constraints however, “builders continue to face several supply side challenges, including a scarcity of buildable lots and skilled labor, and new restrictive codes that continue to increase the cost of building homes.”