U.S. homebuilder sentiment declined for a third straight month in March, according to a report from the National Association of Home Builders Monday. The NAHB/Wells Fargo Housing Market index fell two points to 53 from the month prior, the group said in a statement.
Economists polled by Reuters had forecast the index would edge up to 56.
“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.
Readings above 50 mean more builders view market conditions as favorable than poor. But the index, which has not been below 50 since June 2014, still showed more builders view market conditions as favorable.
“The drop in builder confidence is largely attributable to supply chain issues, such as lot and labor shortages as well as tight underwriting standards,” NAHB Chief Economist David Crowe said 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.”
However, two of the three HMI components posted losses in March.
The single-family home sales component dropped three points to 58,marking the second straight drop in the subindex. The gauge of single-family sales expectations for the next six months was flat at 59, while prospective buyer traffic slipped to 37 from 39, marking a third straight monthly decline.