The National Association of Home Builders/Wells Fargo Housing Market Index increased to 85 in February. NAHB Chairman Chuck Fowke noted that strong buyer demand helped offset supply chain challenges as lumber prices continue to rise, halting some builder’s projects at a time when inventory is at an all-time low.
“Demand conditions remain solid due to demographics, low mortgage rates and the suburban shift to lower cost markets, but we expect to see some cooling in growth rates for residential construction in 2021 due to cost factors, supply chain issues and regulatory risks,” said NAHB Chief Economist Robert Dietz. “Some builders are at capacity and may not be able to expand production due to these headwinds.”
The HMI component measuring buyer traffic rose four points to 78. The component measuring current sales conditions was unchanged at 90, and the component measuring sales expectations in the next six months declined three points to 81.
Looking at the three-month moving averages for regional HMI scores, the Midwest fell one point to 81, the Northeast rose two points to 78, the South dropped two points to 84 and the West posted a two-point loss to 93.
Read the NAHB release.