NAHB index falls in March

The National Association of Home Builders just released its latest report on the housing industry. The overall index fell to 15 in March from 17 in February. Among the subindices, the index tracking present sales declined to 15 from 17, while the index measuring perceptions about future sales dropped to 24 from 27. Those figures are roughly in the same range as they've been for months. However, an index measuring present buyer traffic slumped to 10 from 12 -- the lowest reading in a year.

Regionally speaking, the Northeast fared the best. Its index rose to 23 from 18. The West index also inched up to 15 from 14. Meanwhile, the South index fell to 18 from 19 and the Midwest index slid to 10 to 13.

Home buying activity remains muted, especially on the new housing side of the ledger. Builders of new homes are simply having a very difficult time competing against "nearly new" homes being dumped on the market by burned speculators and banks. That dynamic will persist for some time because foreclosed homes will continue to be parceled out into the market over the next couple of years. Still, we're slowly but surely working through the overhang of excess inventory. That will eventually help stabilize home pricing and make life easier on the builders.