According to the National Association of Home Builders/Wells Fargo Housing Market Index, confidence in the demand for new, single-family homes dropped two points to 15 in March.
"Unusually poor weather conditions certainly had a negative effect on builders' business in February," said Bob Jones, NAHB chairman.
Along with adverse weather, Jones said that more distressed properties entering the market is undercutting the demand for new, single family homes.
In order to obtain the confidence number, builders are asked to rate the potential for new home sales as either "poor," "fair" or "good," while also taking the amount of prospective buyers into account. A number over 50 on the index shows that more builders view the market in the positive light than not.
A recent report from the U.S. Census Bureau showed that construction spending declined during January. Overall, spending on construction declined 0.6 percent from December to January. On a year-to-year basis, spending was down 9.3 percent.
