Confidence among home builders fell in March. Learn more about this and other real estate market trends.
Home builders’ confidence declined in March amid rising costs of materials and labor, and continued problems with appraisals and credit, according to the latest real estate market trends reported today by the National Association of Home Builders or NAHB.
At the same time, a shrinking inventory of homes and rising prices has helped reduce mortgage delinquency rates in some of the nation’s most depressed housing markets, according to an analysis of CoreLogic data released today by the National Association of Realtors or NAR.
Recovering real estate prices has helped homeowners rebuild wealth and boosted the number of Millionaire househods in the U.S.
Builder confidence as measured by the NAHB Housing Market Index fell two points to a reading of 44 in March, down from a six-year high of 47 reached in December. Builders are reporting an increased demand for new homes but rising construction costs and continued problems completing sales are lowering their outlook for real estate market trends.
“In addition to tight credit and below-price appraisals, home building is beginning to suffer growth pains as the infrastructure that supports it tries to re-establish itself,” David Crowe, chief economist for the NAHB, said in a statement. “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.”
Rising home prices – the result of increasing demand and shrinking inventory – has helped reduce the number of homeowners heading toward foreclosure in the markets hardest hit by the recession, according to an analysis released today by Ken Fears, regional economics manager for the NAR. From December 2011 to December 2012 mortgage delinquency rates showed the biggest decreases in the Las Vegas, Phoenix, Miami, Fort Myers and Riverside, CA, areas.
“The increase in sales eroded inventories resulting in steady price growth. As a result more people were able to refinance into affordable situations or dispose of their properties prior to foreclosure,” Fears said. “Clearly, markets in the sand states that were hit hardest during the housing recession experienced the strongest improvements.”
Improving market fundamentals has also increased the appeal of private real estate funds among affluent investors.
In other real estate market trends, homebuyers ranked central air conditioning as the most important feature in a home, followed by a walk-in closet in the master bedroom, having a home that was ready for cable, satellite TV and/or the Internet and an en-suite master bedroom, according the 2013 Profile of Buyers Home Feature Preferences from NAR.