A harsh winter and “modest” housing recovery has kept home-builder confidence mostly in check over the past several months, with the latest update showing a slight dip.
Confidence among builders in the market for single-family homes in February fell two points to a level of 55 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released Tuesday.
Any number over 50 indicates that more builders view conditions as good than poor.
“Overall, builder sentiment remains fairly solid, with this slight downturn largely attributable to the unusually high snow levels across much of the nation,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.
With record-breaking snow fall and frigid temperatures, Builders’ outlook for current sales conditions and prospective buyer traffic slipped in February, but the projection for sales conditions over the next six months held steady.
“For the past eight months, confidence levels have held in the mid- to upper 50s range, which is consistent with a modest, ongoing recovery,” said NAHB Chief Economist David Crowe. “Solid job growth, affordable home prices and historically low mortgage rates should help unleash growing pent-up demand and keep the housing market moving forward in the year ahead.”
Average mortgage rates have held well below 4 percent for weeks, which bodes well for a rejuvenated housing market in the spring.
Two of the three HMI components posted losses in February. The component gauging current sales conditions edged one point lower to 61, while the component measuring buyer traffic fell five points to 39. The gauge charting sales expectations in the next six months held steady at 60.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell a single point to 46, and the Midwest and South each posted a two-point drop to 54 and 57, respectively. The West rose two points to 68.