The HMI index gauging current sales conditions in March grew two points to 49, and the gauge measuring traffic of prospective buyers climbed three points to 31 – the strongest traffic reading since September 2021. The component charting sales expectations in the next six months dropped one point to 47.
“While financial system stress has recently reduced long-term interest rates, which will help housing demand in the coming weeks, the cost and availability of housing inventory remain a critical constraint for prospective home buyers,” said NAHB chief economist Robert Dietz. “For example, 40% of builders in our March HMI survey currently cite lot availability as poor. And a follow-on effect of the pressure on regional banks, as well as continued Fed tightening, will be further constraints for acquisition, development and construction (AD&C) loans for builders across the nation. When AD&C loan conditions are tight, lot inventory constricts and adds an additional hurdle to housing affordability.”
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