Dive Brief:
- The National Association of Home Builders/Wells Fargo Housing Market Index slipped three points in February to 58 after the upwardly revised January score of 61.
- All four U.S. regions posted declines in the three-month moving average HMI score. The Midwest slipped one point to 57, the West dropped three points to 72, the Northeast slid two points to 47, and the South also decreased two points to 59.
- Economists had predicted builder confidence would remain steady in February, with a mark of 60 expected this month, according to CNBC.
Dive Insight:
The NAHB attributed February's dip in builder confidence to the ongoing problems of a lack of skilled labor and available land.
"Builders are reflecting consumers' concerns about recent negative economic trends," NAHB Chief Economist David Crowe said in a release.
In a report released earlier this month, the NAHB found that 76% of builders said cost/availability of labor topped their 2016 list. Last year, 71% of builders responded that labor was a significant problem. And 59% of builders expect cost/availability of developed lots to be a problem in 2016, up from 58% in 2015.
Although the index slipped in February, it is still well above 50 — which indicates most builders are optimistic about conditions in the single-family home market.
NAHB Chairman Ed Brady said in a release, "They are still positive about the housing market... Of note, they expressed optimism that sales will pick up in the coming months."
As the first in the string of February housing market reports, the disappointing results in February's index set a pessimistic tone for the reports that will be released in the coming days, including home sales and housing starts.
