U.S. homebuilder sentiment slipped in March, falling to the lowest level in five months as supply chain concerns and rising costs dented enthusiasm, data from the National Association of Home Builders showed on Monday.
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The NAHB/Wells Fargo Housing Market index fell to 44 from 46 in February, missing expectations for a gain to 47. It was the lowest level since October 2012.
Homebuilder sentiment climbed strongly through the second half of 2012 as the housing sector improved, though the index has now pulled back for two months in a row. Even with March's decline, it is 16 points higher than it was a year ago.
Still, it remains below the 50 level that indicates more builders view market conditions as poor than favorable. The index has not been above 50 since April 2006.
"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,'' NAHB Chairman Rick Judson said in a statement. "At the same time, problems with appraisals and credit availability remain considerable obstacles to completing deals.''
The single-family home sales component dropped to 47 from 51. The forward-looking measures fared better and the gauge of single-family sales expectations for the next six months rose to 51 from 50, while prospective buyer traffic gained to 35 from 32.