Poor Weather Puts A Damper On Builder Confidence In February
Tuesday, February 18, 2014 at 3:02PM February 18, 2014
Unusually severe weather conditions across much of the nation along with continued concerns over the cost and availability of labor and lots caused builder confidence in the market for newly-built, single-family homes to post a 10-point drop to 46 on the National Association of Home Builders/Wells Fargo Housing Market Index, released today.
"Significant weather conditions across most of the country led to a decline in buyer traffic last month," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware. "Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor."
"Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry," said NAHB Chief Economist David Crowe. "The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes."
Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales expectations for the next six months as "good", "fair" or "poor". The survey also asks builders to rate traffic of prospective buyers as "high to very high", "average" or "low to very low". Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Looking at three-month moving averages for regional HMI scores, the West was unchanged at 63 in February while the Midwest registered a one-point decline to 57, the South registered a three-point decline to 53 and the Northeast posted a four-point decline to 38.
More information on housing statistics is available at housingeconomics.com.
Source: National Association of Home Builders
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