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Home builder confidence in the new, single-family construction market is healthy, but hurdles remain, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The Index reading for February was 72. An above-50 reading indicates more builders have a positive outlook than a negative one.

“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.”

Home builders’ expectations regarding present single-family home sales dipped in February, down one point to 78, and their expectations regarding expected single-family home sales ticked up two points to 80. Expected homebuyer 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 Robert Dietz, chief economist of the NAHB. “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.”

Source: National Association of Home Builders (NAHB)

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