Builder confidence in the market for newly-built single-family homes saw a four-point increase this month to 62, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
All of the HMI indices posted increases this month: The Index measuring current sales conditions was up by three points to 67, while the component gauging expectations in the next six months increased five points to 68 and the metric charting buyer traffic saw a four-point gain to 48. February marked the second straight month with increases in every Index.
“Builder confidence levels moved up in tandem with growing consumer confidence and falling interest rates,” said NAHB Chief Economist Robert Dietz. “The five-point jump on the six-month sales expectation for the HMI is due to mortgage interest rates dropping from about five percent in November to 4.4 percent this week. However, affordability remains a critical issue. Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points.”