Builder confidence in the market for newly built, single-family homes in March dropped by two points to 53, according to the National Association of Home Builders Housing Market Index.
A level of 50 or higher means more builders have confidence in the market than do not have confidence.
Two of the three HMI components showed decreases in March. The component that observes current sales conditions went down three points to 58, and the component that measures buyer traffic dropped two points to 37. Meanwhile, the gauge that charts sales expectations in the next six months stayed the same at 59.
"The drop in builder confidence is largely attributable to supply chain issues, such as lot and labor shortages as well as tight underwriting standards," said NAHB Chief Economist David Crowe 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."
