While housing market is ripe for growth, homebuilder confidence has yet to benefit from this, the latest National Association of Home Builders/Wells Fargo Housing Market Index said.
Builder confidence in the market for newly-built single-family homes unexpectedly dropped three points to 58 in February, down from an upwardly revised January reading of 61.
Chief Economist at Stifel Fixed Income Lindsey Piegza, said in a note that the NAHB Housing Market Index was expected to remain unchanged at 60 in February.
For the survey, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low."
“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, a home builder and developer from Bloomington, Ill. “Of note, they expressed optimism that sales will pick up in the coming months.”
The most recent new home sales report said that sales of new single-family houses in December came in at a seasonally adjusted annual rate of 544,000, surpassing analyst expectations.
Even Home Depot announced it will hire 80,000 seasonal workers, further cementing that the spring homebuying season is almost here.
NAHB Chief Economist David Crowe added that builders are reflecting consumers’ concerns about recent negative economic trends.
“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,” Crowe said.
Looking at the three-month moving averages for regional HMI scores, all four regions posted slight declines. The Midwest fell one point to 57, while the West registered a three-point drop to 72. The Northeast and South each reported a two-point decline to 47 and 59, respectively.