According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) survey, builder confidence in the market for new single-family homes declined in March.

The decline is due, in part, to subprime mortgage issues. After rising fairly steadily since its recent low last September, the HMI declined three points from 39 in February to 36 in March.

Derived from NAHB’s monthly survey, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months along with the traffic rate of prospective buyers. Scores for each are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
 
All three component indexes registered declines in March after having risen in February.
 
Regionally, HMI results are mixed. In the Midwest and West, the index showed an in increase of a point for each. In the Northeast, the HMI declined two points, and in the South, it fell four points. All scores were below 50.

“Builders are uncertain about the consequences of tightening mortgage lending standards for their home sales down the line, and some are already seeing effects of the subprime shakeout on current sales activity,” said NAHB Chief Economist David Seiders.

“The fundamentals of today’s housing market still are relatively strong, including a favorable interest-rate structure, solid growth in employment and income, lower energy prices and improving affordability in much of the single-family market due in part to price cuts and non-price sales incentives offered by builders.”

NAHB said it forecasts modest improvements in home sales during the balance of 2007.
 
HMI tables can be accessed online at: www.nahb.org/hmi. More information regarding housing statistics is also available at www.housingeconomics.com.

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