U.S. homebuilders’ confidence in the housing market edged
higher this month, reflecting improved demand for new homes as the
traditional spring home-selling season ramps up.
But the outlook
for sales of single-family homes over the next six months dimmed
slightly as builders continue to grapple with a shortage of skilled
workers, ready-to-build land and rising building materials costs.
The
National Association of Home Builders/Wells Fargo builder sentiment
index released Monday rose to 47. That’s up from February’s reading of
46.
Readings below 50 indicate that more builders view sales conditions as poor rather than good.
The
overall index had been above 50 from June through January, reflecting a
strengthening housing market. The latest reading, based on responses
from 296 builders, comes as the spring home-selling season gets going.
The season typically sets the pattern for residential hiring and
building construction in the ensuing months.
A surprisingly strong
pace of new-home sales in January boosted hopes that the spring buying
season will be solid enough to lift the overall economy. Sales jumped
9.6 percent to a seasonally adjusted annual rate of 468,000. That’s the
fastest pace in more than five years.
The strength in purchases followed a slowdown that had been linked to higher mortgage rates and severe
winter weather.
Despite
the sharp increase in sales of new homes in January, many builders are
having trouble finding skilled workers and land parcels cleared for new
construction.
"A number of factors are raising builder concerns
over meeting demand for the spring buying season," said David Crowe, the
NAHB’s chief economist. "These include a shortage of buildable lots and
skilled workers, rising materials prices and an extremely low inventory
of new homes for sale."
Those factors and the lingering impact of
severe winter weather weighed on a survey of builders’ expectations for
sales over the next six months. The March reading fell one point to 53,
the lowest level since May.
Even so, builders’ view of current
sales conditions for single-family homes rose one point this month to
52, while a measure of traffic by prospective buyers increased two
points to 33.
Housing, while still a long way from the boom of
several years ago, has been recovering over the past two years.
Residential construction has grown at double-digit rates over the past
two years and contributed about one-third of a percentage point to
overall economic growth last year.
Many economists predict that
sales of both new and existing homes will rise in 2014, lifted by an
improving economy and steady job growth.
Though new homes
represent only a fraction of the housing market, they have an outsize
impact on the economy. Each home built creates an average of three jobs
for a year and generates about $90,000 in tax revenue, according to data
from the homebuilders association.
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