Partly reflecting a decrease in buyer traffic, the National Association of Home Builders released a report on Wednesday unexpectedly showing a continued decrease in U.S. homebuilder confidence in the month of February.
The report said the NAHB/Wells Fargo Housing Market Index dropped to 65 in February from 67 in January. The decrease surprised economists, who had expected the index to inch up to 68.
The housing market index moved lower for the second consecutive month after reaching its highest level in over eleven years in December.
"With much of the decline this month resulting from a decrease in buyer traffic, builders continue to struggle to minimize costs while dealing with supply side challenges such as a lack of developed lots and labor shortages," said NAHB Chief Economist Robert Dietz.
He added, "Despite these constraints, the overall housing market fundamentals remain strong and we expect to see continued growth this year as some of these concerns are addressed."
The report showed a notable decrease by the index component measuring buyer traffic, which slid to 46 in February from 51 in January.
The component charting sales expectations in the next six months also fell to 73 in February from 76 in January, while the component gauging current sales conditions edged down to 71 from 72.
On Thursday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of January.
Housing starts are expected to rise to an annual rate of 1.232 million in January after jumping by 11.3 percent to a rate of 1.226 million in December.
by RTT Staff Writer
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