Home builder confidence in the U.S. market for new single-family homes increased for the fifth consecutive month in February, rising from 25 to 29 on the Housing Market Index (HMI) released by the National Association of Home Builders (NAHB) and Wells Fargo. This is the highest level the index has reached in more than four years.
Each of the HMI's three components also improved for a fifth consecutive month in February. The component measuring traffic of prospective buyers rose from 21 to 22, and the component measuring sales expectations for the next six months increased from 29 to 34. The component measuring current sales rose from 25 to 30.
‘Builder confidence has doubled since September as measured by the HMI,’ says NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. ‘Given the recent improvements in new home starts and the increasing number of markets included in the NAHB/First American Improving Markets Index, this consistency suggests that the housing market is moving toward more sustainable growth.’
The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and 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 from 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.