Builder confidence has been rattled by the uncertainty surrounding the COVID-19 coronavirus outbreak.
The National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released Tuesday for March, declined 4 points to 72. But it marks six months of the index holding above 70 (a reading above 50 means conditions are improving).
“It is important to note that half of the builder responses in the March HMI were collected prior to March 4, so the recent stock market declines and the rising economic impact of the coronavirus will be reflected more in next month’s report,” said NAHB Chief Economist Robert Dietz. “Overall, 21% of builders in the survey report some disruption in supply due to virus concerns in other countries such as China. However, the incidence is higher (33%) among builders who responded to the survey after March 6, indicating that this is an emerging issue.”
Where sentiment is weakest
The HMI index gauging current sales conditions fell two points to 79, the component measuring sales expectations in the next six months dropped four points to 75 and the gauge charting traffic of prospective buyers also decreased one point to 56.
The Midwest saw the largest drop, of 2 points to 66, while the South and West posted 1-point decreases (to 77 and 82 respectively). The Northeast posted a two-point gain to 64.
More market update: