Homebuilder confidence continues to fall in February

by Ryan Smith17 Feb 2016
Builder confidence in the market for newly built single-family homes continued to slide this month, falling three points from January’s reading of 61 on the National Association of Home Builders/Wells Fargo Housing Market Index.

The index gauges U.S. homebuilders’ responses to a national survey about their perceptions of the housing market. Any reading above 50 indicates that more builders view conditions as good than poor.

“Though builders report the dip in confidence this month is partly attributable to the high cost and lack of availability of lots and labor, they are still positive about the housing market,” said NAHB Chairman Ed Brady. “Of note, the expressed optimism that sales will pick up in the coming months.

“Builders are reflecting consumers’ concerns about recent negative economic trends,” said David Crowe, NAHB chief economist. “However, the fundamentals are in place for continued growth of the housing market. Historically low mortgage rates, steady job gains, improved household formations and significant pent up demand all point to a gradual upward trend for housing in the year ahead.”
Indeed, while confidence in the current market is down, the HMI component measuring sales expectations in the next six months was up one point to 65.

Regional HMI scores were down in all four regions of the U.S. The Midwest fell one point to 57, Northeast and South each posted a two point drop, falling to 47 and 59, respectively. The West, while showing the highest levels of builder confidence, also saw the biggest drop, falling three points to 72.

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