Builder Confidence in Housing Market Unexpectedly Jumps to Highest Level Since July as Buyer Demand Rises

Builders' confidence in the U.S. housing market unexpectedly rose to the highest level since July, jumping to 51 in March on the National Association of Home Builders/Wells Fargo Housing Market Index.

The increase marks the fourth consecutive monthly rise in builder sentiment as more home buyers gravitate toward new construction amid low inventory of existing homes.

Economists expected the index to remain flat at 48 in March. Any reading below 50 signals negative sentiment.

Builders cite strong buyer demand but ongoing supply-side challenges like shortages of buildable lots, skilled labor, and restrictive building codes that increase costs.

Sentiment fell last summer when mortgage rates shot above 7% but has rebounded lately as rates have declined, raising builder optimism that the worst may be over.