Builder sentiment rose three points to 51 in March, turning positive for the first time since July 2023; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to NAHB. It reached a record high of 90 in November 2020.
All three components of the homebuilder index increased. Sales expectations in the next six months climbed two points to 62; current sales conditions rose four points to 56; and buyer traffic increased two points to 34.
“Buyer demand remains brisk and we expect more consumers to jump off the sidelines and into the marketplace if mortgage rates continue to fall later this year,” said NAHB Chairman Carl Harris. “But even though there is strong pent-up demand, 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.”
The average rate on the 30-year fixed mortgage has hovered around 7% since early February.
Twenty-four percent of builders reported cutting prices in March, which is down from 25% in February. The average price discount is holding at 6%. Additionally, 60% of builders provided sales incentives of all types in March, which is up from 58% in February.
