Home Builder confidence improved slightly in March, but the housing market is still under pressure.

I'm Kathy Fedke and this is Real Estate News for investors.

This is Real Estate News with Kathy Fedke.

New data from the National Association of Home Builders shows builder's sentiment rose by one point to 38.

Anything below 50 is considered negative, so while this is an improvement, builders are still feeling cautious.

In fact, sentiment hasn't been in positive territory since April of 2024.

There is a small bright spot though. Buyer traffic increased,

with that index rising three points. But affordability continues to be the biggest challenge.

High home prices and elevated mortgage rates are keeping many buyers on the sidelines.

To move inventory, builders are still offering incentives. About

64% of builders use sales incentives in March, and 37% actually cut prices. That tells us

demand is soft. Looking ahead, builders are slightly more optimistic. Sales expectations for

the next six months rose to 49. That's still below

neutral, but moving in the right direction. At the same time, the broader housing market is facing

new risk. Rising tensions in the Middle East are adding to concerns about inflation, especially if

energy prices move higher. Economists warn that any disruption to global

oil supply could increase costs across the economy, including housing. We're already seeing

some impact. Yields on the 10-year Treasury have climbed, and mortgage rates have moved back

above 6%. Higher rates make homes less affordable, and that puts even more pressure on

demand. There's also uncertainty in Washington. A major housing bill aimed at boosting supply is moving

through Congress, but parts of it are facing pushback from industry groups. That uncertainty is adding

to the cautious outlook for builders. So as we head

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