Builders’ confidence in the market for new single-family homes was steady as the National Association of Home Builders’ housing market index — a monthly gauge of builder sentiment — remained 16 in February, its fourth consecutive month at that low level.

Thomson Reuters’ poll of economists predicted a level of 17.

“While builders are starting to see more interest among potential home buyers, we are also dealing with a multitude of challenges, including competition from foreclosure properties and inaccurate appraisals of new homes, which are limiting our ability to sell,” said NAHB chairman Bob Nielsen.

“On top of that, an extremely tight lending environment continues to make it almost impossible to obtain credit for viable new and existing projects, and most do not see that situation improving anytime soon,” he added.

The group’s chief economist, David Crowe said: “Builders are telling us that some pockets of optimism have begun to emerge, but many prospective purchasers are concerned about selling their existing home in the current market, or face difficulty securing credit for a home purchase — even when they are well-qualified.

“Adding these concerns to the severe difficulty that builders continue to confront in obtaining acquisition, development, and construction financing, you can understand why builder sentiment has not improved over the past four months.”

Derived from a monthly survey that NAHB has been conducting for more than 20 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.

Two of the three component indexes rose in February. The current single-family home sales index rose to 17 from 15, and the sales expectations index for the next six months climbed to 25 from 24. The traffic of prospective buyers index remained at 12.

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