Home builders’ confidence remains strong in February

Homebuilders continue to remain optimistic and confident about the housing market.

The latest National Association of Home Builders/Wells Fargo Housing Market Index was 72 in February, tying the score of the previous month. A score above 50 shows builders feel positive about the market, according to the association.

“Builders are excited about the pro-business political climate that will strengthen the housing market and support overall economic growth,” said Randy Noel, chairman of the NAHB, in a statement. “However, they need to manage supply-side construction hurdles, such as shortages of labor and lots and building material price increases.”

The survey, which is done every month, asks builders their opinions on current single-family home sales, sales expectations for the next six months, along with the traffic of potential buyers. They then combine the three scores to form the overall one. Home builders were most positive about sales expectations over the next six months, hitting 80, a six-point increase from January. Home builders’ opinions on current single-family sales conditions fell one point to 78, while anticipated buyer traffic remained the same at 54.

“The HMI gauge of future sales expectations has reached a post-recession high, an indicator that consumer demand for housing should grow in the months ahead,” said NAHB Chief Economist Robert Dietz in a statement. “With ongoing job creation, increasing owner-occupied household formation, and a tight supply of existing home inventory, the single-family housing sector should continue to strengthen at a gradual but consistent pace.”

Across the country, the Midwest increased two points to 72, the South rose one point to 74, the West stayed the same at 81 and Northeast fell two points to 56.