Builder confidence is igniting, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The February Index reads 62; in January, it was 58. At 51 or higher, the general outlook is positive.
“Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment,” said Randy Noel, chairman of the NAHB, in a statement. “In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season.”
“Builder confidence levels moved up in tandem with growing consumer confidence and falling interest rates,” said Robert Dietz, chief economist at the NAHB. “The five-point jump on the six-month sales expectation for the HMI is due to mortgage interest rates dropping from about 5 percent in November to 4.4 percent this week.
“However, affordability remains a critical issue,” Dietz said. “Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points.”
