The NAHB housing market index for March is out.
Homebuilder confidence fell to 44, missing expectations for a rise to 47.
“Although many of our members are reporting increased demand for new homes in their markets, their enthusiasm is being tempered by frustrating bottlenecks in the supply chain for developed lots along with rising costs for building materials and labor," said NAHB Chairman Rick Judson in a press release.
"At the same time, problems with appraisals and credit availability remain considerable obstacles to completing deals."
Paul Diggle at Capital Economics has previously said that capacity constraints among mortgage lenders is creating bottlenecks and presenting an obstacle to the housing recovery.
Moreover, during the recession many companies downsized, many shut down and this ensures that any recovery will be "bumpy".
The subindex measuring current sales conditions declined to 47. The component gauging sales expectations in the next six months increased to 51. The component measuring traffic of prospective buyers increased to 35.
Homebuilder confidence is considered a good leading indicator of the housing market.
Moreover, Bank of America's Michelle Meyer thinks "a positive feedback loop has begun". When people think home prices are rising, they think they will keep doing so and credit conditions will improve, and this in turn increases demand for homes.
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