Economy

Builder Confidence Shaken by Winter Storms

February 18, 2014

Winter weather has taken its toll on builder confidence in the single-family home market says the National Association of Homebuilders. Builders also expressed concern about labor shortage and scarcity of available lots. The NAHB/Wells Fargo Housing Market Index dropped 10 points to 46, with all three of the major components of the index falling in February. An indicator of 50 is the neutral mark for builder perception, a reading below 50 indicates that more builders view conditions as poor rather than good.

“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, Del. “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.”

The component for current sales conditions fell 11 points to 41, sales expectations for the next six months dropped six points to 54, and the buyer traffic component fell nine points to 31.

In the three-month moving averages for the regional HMI, the West was unchanged at 63, the Midwest fell one point to 57, the South dropped three points to 53, and the Northeast fell four points to 38. (Source: NAHB)