Housing Market Index Unable To Bounce Back After February's Record Plunge

The NAHB Housing Market Index was only able to marginally bounce in March after the record one month free fall in February. The headline number came in at 47 vs expectations of 50. The West region was particularly weak. It dropped another 5 points to 29 which is the lowest level since August 2012. The HMI has had a decent relationship with the year-over-year change in house prices. However, right now the two series are diverging. We will have to keep an eye on whether or not this divergence continues (last chart).