Home builders are becoming less confident in beginning new construction projects, according to the National Association of Home Builders.
Instead of the anticipated one-point raise in the Housing Market Index to 47, builder confidence dropped two points to 44. This makes March the third month the HMI didn’t increase.
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January was the first month after eight months straight that the confidence level didn’t improve. Since then it has reduced slowly.
Part of the drop is caused by rising costs for building materials and labor as well as credit availability.
“During the great recession, the industry lost home-building firms, building material production capacity, workers who retreated to other sectors and the pipeline of developed lots,” NAHB chief economist David Crowe said in the press release. “The road to a housing recovery will be a bumpy one until these issues are addressed.”