Homebuilders’ confidence in the single-family housing market slipped in March, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), which

NAHB chief economist David Crowe expects the housing market to pick up in 2015.
NAHB chief economist David Crowe expects the housing market to pick up in 2015.

came out on Monday.

The index dropped two points to 53, the third month in a row it’s fallen.

“The drop in builder confidence is largely attributable to supply chain issues, such as lot and labor shortages as well as tight underwriting standards,” said NAHB’s chief economist David Crowe. “These obstacles notwithstanding, we are expecting solid gains in the housing market this year, buoyed by sustained job growth, low mortgage interest rates and pent-up demand. We’re struggling against some other headwinds. It’s been a modest recovery at best, so it isn’t surprising to see these monthly deviations.”

Two of the three HMI components fell in March. Sales conditions fell three points to 58, while buyer traffic dropped two points to 37. Sales expectations in the next six months held steady at 59.

“Even with this slight slip, the HMI remains in positive territory and we expect the market to improve as we enter the spring buying season,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

The Northeast and South each posted a two-point drop to 43 and 55, respectively, in regional three-month moving averages. The Midwest rose two points to 56, while the West fell seven points to 61.

Looking ahead, Crowe says the NAHB expects 1.1 million housing starts in 2015.

The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months. Any number over 50 indicates that more builders view conditions as good rather than poor.

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