Home builder confidence has been held back, primarily as a result of harsh winter weather. However, the spring buying season is approaching and could cause an increase in home builder confidence, which should be an encouraging sign for those buying a home.
The National Association of Home Builders' housing market index increased one point in March after falling a record 10 points in February on a month-over-month comparison. The index hit 47 in March, marking its second-lowest level since May 2013. And while any reading under 50 means that the majority of home builders are not confident with the housing market, the slight increase should provide some silver lining for this upcoming homebuying season.
According to the experts, the winter weather along with a number of other factors were to blame for the little confidence among builders.
"A number of factors are raising builder concerns over meeting demand for the spring buying season," said NAHB Chief Economist David Crowe. "These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale."
Mortgage rates slightly up
While builder confidence showed mixed signs in March, mortgage rates were also up.
According to the latest Primary Mortgage Market Survey from Freddie Mac, mortgage rates increased as a result of improvements in the housing market and the economy.
A 30-year fixed-rate mortgage averaged 4.37 percent in the week ending March 13, up from 4.28 percent a week before. At the same time, a 15-year fixed-rate mortgage averaged 3.38 percent during the week, up from 3.32 percent a week before. While mortgage rates increased in the latest survey, a home purchase is still affordable and buyers should be well-positioned come spring.
"Mortgage rates edged up amid a week of light economic reports," said Frank Nothaft, vice president and chief economist at Freddie Mac. "Of the few releases, the economy added 175,000 jobs in February, which was above the market consensus forecast and followed an upward revision of 25,000 jobs for the prior two months. Meanwhile, the unemployment rate nudged up to 6.7 percent, the first rate increase in over a year."
Those planning on buying a home this year are reminded to have a reputable home inspector come look at the property they are interested in. The insights provided in a home inspection will help a buyer be more confident in their purchase.