US Builder Confidence Declines for Second Consecutive Month in March

On Monday, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reported that builder sentiment in the market for newly built single-family homes in March fell to a reading of 39, down 3 points from February and the lowest level in 7 months.

NAHB said that economic uncertainty, the threat of tariffs, and elevated construction costs pushed sentiment lower even as builders express hope that a better regulatory environment will lead to an improving business climate.

The March HMI survey also revealed that 29% of builders cut home prices in March, up from 26% in February. Meanwhile, the average price reduction was 5%, the same rate as the previous month. The use of sales incentives was 59%, also unchanged from February.

Two out of the three of the major HMI indices posted losses. Current sales conditions fell three points to a reading of 43, its lowest point since December 2023. The gauge charting traffic of prospective buyers dropped five points to 24, while the component measuring sales expectations in the next six months held steady at 47.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell three points to a reading of 54, the Midwest moved three points lower to a reading of 42, the South dropped four points to a reading of 42, and the West posted a two-point decline to a reading of 37.