The National Association of Home Builders/Wells Fargo housing market index saw a one-point decline to 46 in February. It has essentially leveled out and stayed in a three-point range over the last four months.
The index splits negative vs. positive outlooks at 50. Greater than 50 represents a more positive view on the market for new homes.
“Having risen strongly in 2012, the (index) hit a slight pause in the beginning of this year as builders adjusted their expectations to reflect the pace at which consumers are moving forward on new-home purchases,” said NAHB Chief Economist David Crowe.
The pause in optimism “is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit, but it’s also a reflection of the fact that builders are now confronting rising costs for building materials and, in some markets, limited availability of labor and lots as demand for new homes strengthens,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C.
Nonetheless, the index remains near its highest level since May of 2006, and builders say they expect to continue on a “modest rising trajectory” this year, said Crowe.
The component of the housing market index that gauges current sales conditions fell by a single point to 51 in February, but holding above the critical mid-point of 50 for a third consecutive month.
The component gauging current sales conditions fell by a single point to 51 in February.
Meanwhile, the component gauging sales expectations in the next six months rose by one point, to 50, and the component gauging traffic of prospective buyers slipped four points, to 32.