For the first time in nearly a year, homebuilder confidence dropped this month, due in part to rising costs of construction and limited labor, according to a statement by Rick Judson, chairman of the National Association of Home Builders, or NAHB. He also blames stricter mortgage lending standards and job uncertainty.
The NAHB index measures three components, with 50 being the line between positive and negative sentiment. Current sales fell one point to 51, while sales expectations over the next six months rose one point to 50. Buyer traffic, the third component, is still the weakest. It fell four points to 32. Overall, the index fell from 47 in January to 46 in February.
January marked the highest point of the index since April 2006. In the years leading up to the Great Recession, the index averaged around 54. In 2009, it stood at 8, a record low.
The Midwest and the South both declined, while activity rose in the Northeast and West. In the Northeast, part of the rise in construction activity is a result of damage caused by Superstorm Sandy.
In a statement, the NAHB forecast moderate home construction this year, as builders adjust their expectations for homebuying activity.
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