NAHB Housing Index Slips to 65 in Feb.

Builders' confidence in the market for new single-family homes dipped as the National Association of Home Builders' housing market index fell to 65 in February from 67 in January.

Thomson Reuters' poll of economists predicted the index would be 67.

"While builders remain optimistic, we are seeing the numbers settling back into a normal range," NAHB Chairman Granger MacDonald said.

"With much of the decline this month resulting from a decrease in buyer traffic, builders continue to struggle to minimize costs while dealing with supply side challenges such as a lack of developed lots and labor shortages," according to NAHB Chief Economist Robert Dietz. "Despite these constraints, the overall housing market fundamentals remain strong and we expect to see continued growth this year as some of these concerns are addressed."

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

The current single-family home sales index fell to 71 from 72, the sales expectations index for the next six months decreased to 73 from 76; and the traffic of prospective buyers index dropped to 46 from 51.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER