US Homebuilder Sentiment Above Forecasts

The NAHB/Wells Fargo Housing Market Index in the United States increased to 51 in March 2024, the highest in eight months, compared to 48 in February and beating forecasts of 48.

Yet, builder sentiment improved for a fourth month, prompted by 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.

The gauge current sales conditions increased four points to 56, the component measuring sales expectations in the next six months rose two points to 62 and the component gauging traffic of prospective buyers increased two points to 34. “With the Federal Reserve expected to announce future rate cuts in the second half of 2024, lower financing costs will draw many prospective buyers into the market.

However, as home building activity picks up, builders will likely grapple with rising material prices, particularly for lumber”, said NAHB Chief Economist Robert Dietz.