Builder confidence drops in February but reflects continued recovery

Home builder confidence fell slightly in February as severe winter weather weighed on the outlook. 

Sentiment in the market for newly built, single-family homes fell two points to 55 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released on Tuesday.

{mosads}”Overall, builder sentiment remains fairly solid, with this slight downturn largely attributable to the unusually high snow levels across much of the nation,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

Two of the three index components posted losses in February.

Current sales conditions fell one point to 61 while the gauge measuring buyer traffic fell five points to 39.

Sales expectations for the next six months held steady at 60.

“For the past eight months, confidence levels have held in the mid- to upper 50s range, which is consistent with a modest, ongoing recovery,” said David Crowe NAHB’s chief economist.

“Solid job growth, affordable home prices and historically low mortgage rates should help unleash growing pent-up demand and keep the housing market moving forward in the year ahead.”

Regionally, the Northeast fell one point to 46, and the Midwest and South each posted a two-point drop to 54 and 57, respectively.

The West rose two points to 68.