Midwest only region that sees builders’ confidence increase in March

By Katherine Michalets - Freeman Staff

March 16, 2015

MADISON —Overall, builders of single-family homes across America felt less confident in the housing market in March, according to a report released Monday by the National Association of Home Builders; however, the Midwest showed a significant increase in builders’ confidence for the same period.

Nationally, builders’ confidence in March fell two points to a level of 53, but in the Midwest that level rose to 61 in March, compared to 48 in February and 59 in January.

Wisconsin Builders Association State Executive Officer Kirsten Lee Villegas said the state’s builders are active.

“They are very busy; probably one of the hardest challenges is keeping up with the demand,” she said.
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.”

“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 Chief Economist David Crowe in a statement. “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.”

Two of the three HMI components posted losses in March, including the component gauging current sales conditions, which fell three points to 58 while the component measuring buyer traffic dropped two points to 37. The gauge charting sales expectations in the next six months held steady at 59.

New homes will continue to be built where the jobs are, Lee Villegas said, which have largely been in Dane, Waukesha and Brown counties. As existing home sales increase so will new home sales, she said, because it’s often people living in an existing home who decide to build their next home.