Home builder confidence in the housing market for newly built houses rose three points from February to March, reaching 51, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). It was the fourth consecutive monthly gain, and the first time sentiment passed the breakeven point of 50 since July 2023.

NAHB credited the change to a lack of existing house inventory, strong demand, and mortgage rates below 7% since last December. That has allowed builders to pull back from reducing home prices to boost sales. In December, 36% of builders reported cutting home prices. In March, the number was down to 24%. That's the lowest percentage since July 2023. However, the average price reduction — 6% — has been the same for the last nine months. The number of builders offering some kind of incentive has been between 58% and 62% since September 2023. In March 2024, it was 60%.

"Buyer demand remains brisk and we expect more consumers to jump off the sidelines and into the marketplace if mortgage rates continue to fall later this year," said NAHB Chairman Carl Harris, in prepared remarks. "But even though there is strong pent-up demand, builders continue to face several supply-side challenges, including a scarcity of buildable lots and skilled labor, and new restrictive codes that continue to increase the cost of building homes."