Cold Weather Cools Housing Enthusiasm for February

Homebuilder confidence took a cold dip in February, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index report released today. 

After the reading clocked in at a revised 56 points for January, analysts had expected more of the same for February. Actual results came in a full 10 points lower at 46. 

Any number above 50 indicates that more builders view sales conditions as good than poor, a point reached in June for the first time since April 2006. The survey looks at builder confidence in the market for newly built single-family homes. 

"Significant weather conditions across most of the country led to a decline in buyer traffic last month," said NAHB Chairman Kevin Kelly in a statement today. "Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor."

Digging deeper into components, current sales conditions fell 11 points to squeak out another month of slight improvement at 51, prospective buyer traffic dropped nine points to 31, and future sales expectations for the next six months dipped six points to 54.  

NAHB Chief Economist David Crowe also noted the double-whammy of weather and supply-side shortages: "Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry. The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes."

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