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First Cut: NAHB Housing Market Index holds at six-month high in March

Although not as robust as the conditions that dominated much of the prior two years, the NAHB/Wells Fargo Housing Market Index for March held on at 62 from February and remained the highest in six months. At least some of the ill-effects of higher mortgage rates and steadily rising prices that caused the housing market to slow in the second half of 2018 have dissipated. Mortgage rates are now generally back to the levels seen a year ago. Home price increases — while still on the upswing — have lost momentum and may be less intimidating for potential buyers seeking to negotiate a purchase.

The index components showed present sales at 68, the highest since 74 in October 2018. Expected sales reflected greater optimism at 71 in March, the highest since 75 in October 2018. Buyer traffic dipped to 44 in March, but that retraced a small surge higher to 48 in February after 44 in January. The underlying pace of buyer traffic is reasonably steady at present, if not yet returned to the recent peak of 53 in October 2018 just as increases in mortgage rates started to accelerate.

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