Monday
December 22, 2014

Builder Sentiment Takes Biggest Dive Ever

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Builder Sentiment Takes Biggest Dive Ever

Severe weather conditions and frigid temperatures across the country put a freeze on builders’ confidence this month. The National Association of Home Builders/Wells Fargo Housing Market Index shows builder sentiment posted its largest decline in the index’s 30-year history.

“Significant weather conditions across most of the country led to a decline in buyer traffic last month,” says NAHB Chairman Kevin Kelly. “Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor.”

Builder sentiment over the newly built, single-family homes fell 10 points to 46 this month. Any number below 50 indicates that more builders view conditions as “poor” than “good.” The index gauges builder perceptions of current single-family home sales, sales expectations for the next six months, and prospective buyer traffic. All three components fell in February, with the component measuring current sales conditions falling the most by 11 points to 51.

"Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry," says NAHB Chief Economist David Crowe. "The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes."

But NAHB says it remains positive about the construction and sales outlook for 2014. “Pent-up demand and an improving economy will bring buyers back to the market,” according to NAHB’s Eye on Housing blog.

Source: National Association of Home Builders

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