A lack of homebuyer traffic, developed lots and labor shortages led builder confidence in the market for new single family homes to decline slightly in February, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
The HMI decreased two points to 65 in February compared with its 67 score in January.
“While builders remain optimistic, we are seeing the numbers settling back into a normal range,” NAHB Chairman Granger MacDonald stated in a press release. “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.”
NAHB Chief Economist Robert Dietz attributed February’s decline to less people shopping for new homes and builders struggling with labor shortages and fewer lots ready for building.
“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,” he said.
The index is derived from a monthly NAHB survey that gauges builder perceptions of single family home sales and sales expectations for the next six months. An index score above 50 indicates more builders view market conditions as good than poor.
Regionally, builders rated the Northeast a 50, the Midwest a 65, the South a 67 and the West a 79.