The National Association of Home Builders Housing Market Index is one of the key housing market statistics that we track at FREEandCLEAR. The Housing Market Index incorporates factors such as current and expected new home sales and interest level from potential new home buyers. It is important to highlight that the index focuses on new home sales, so homes built by builders that have never been lived in before, as opposed to existing home sales, which represent a larger portion of the overall housing market.
For March 2015, the Housing Market Index came in at 53 as compared to 55 in both February and January 2015. Any figure above 50 is considered positive and March represents the 9th consecutive month with the index above 50. The March figure came in below industry analyst expectations; however, and the dip relative to February came as a disappointment. The home buyer traffic component of the index continued its downward slide, coming in at 37, down from 39 in February. The traffic component reflects continued weakness from the important first-time home buyer segment of the market. The present home sales component of the index dropped from 61 to 58 while the future home sales component of the index remained unchanged at 59. The relatively disappointing March housing index figure and the continued lack of interest and traffic from first-time home buyers reflects the overall sluggish state of a housing marketing that cannot seem to generate any sustained momentum. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The lack of participation from first-time home buyers continues to be a real drag on the housing and mortgage markets. Whether it is scars from the collapse of the housing market last decade, the challenge of saving for a down payment or more rigorous lender requirements, first-time home buyers continue to choose renting over buying. While there are many good reasons to not buy a home, low interest rates and relatively steady home prices make now a good time for prospective home buyers to explore their options. Review our First-Time Home Buyer Mortgage Cheat Sheet to understand the key steps in the mortgage process and become a more informed mortgage borrower. Then use our INTEREST RATES function to contact lenders in your area and get pre-approved for your mortgage. Being informed and getting pre-approved will allow you to select the mortgage that is right for you and position you to move fast when you decide to buy your first home.
The FREEandCLEAR Mortgage Expert