The steep uptrend in the US NAHB housing market index came to a standstill in March. The index stayed unchanged at a downwardly revised 28, while the consensus was looking for a further increase in March. The breakdown shows that the weakness was based in the present situation sub-index, while the forward looking index improved further from 34 to 36. From the last quarter of 2011 onwards, the index started a strong rebound and rose to the highest level since 2007.
Homebuilders’ sentiment has improved significantly over the previous months, but we are not yet seeing a sustained improvement in the “hard” housing market data. For the NAHB index, there is not yet a reason to worry as a temporary pause is not exceptional after the strong increase recently. In the coming months it will be interesting to see whether the index can extend its rebound as the spring selling seasons comes into full swing.