Builder confidence in the market for newly built, single-family homes in February decreased two points to a level of 65 on the National Association of Home Builders Housing Market Index, meaning more builders view conditions as good than poor in America.
The decline puts the HMI in a “sustainable” range, the NAHB said in a statement.
"While builders remain optimistic, we are seeing the numbers settling back into a normal range," said NAHB Chairman Granger MacDonald. "Regulatory burdens remain a major challenge to our industry, and NAHB looks forward to working with the new Congress and administration to help alleviate some of the pressures that are holding small businesses back and making homes less affordable."
The HMI consists of three components, all of which fell in February. The component gauging current sales conditions dropped one point to 71, sales expectations in the next six months fell three points to 73 and buyer traffic dropped five points to 46.
The three-month moving average for the HMI in the Northeast fell two points to 50 and in the South decreased one point to 67. The Midwest’s HMI rose one point to 65, while the HMI in the West held steady at 79.
"With much of the decline this month resulting from a decrease in buyer traffic, builders continue to struggle to minimize costs while dealing with supply side challenges such as a lack of developed lots and labor shortages," said NAHB Chief Economist Robert Dietz. "Despite these constraints, the overall housing market fundamentals remain strong and we expect to see continued growth this year as some of these concerns are addressed."
