The National
Association of Homebuilders (NAHB) announced on Thursday its housing market
index (HMI) climbed to 48 in February from an unrevised January reading of 44. This
marked the third straight monthly improvement in
builder confidence and the highest confidence level since August 2023 (50).
Economists
had expected the HMI to rise
to 46.
A reading over
50 indicates more builders view conditions as good than poor.
All three major HMI components demonstrated gains in early February. The
component tracking current sales conditions jumped 4 points to 52, the component
measuring traffic of prospective buyers also climbed 4 points to 33, and the
component charting sales expectations in the next six months increased 3 points
to 60.
Commenting on
the latest report, NAHB Chairman Alicia Huey noted that buyer traffic is
improving as even small declines in interest rates will produce a
disproportionate positive response among likely home purchasers.”While mortgage
rates still remain too high for many prospective buyers, we anticipate that due
to pent-up demand, many more buyers will enter the marketplace if mortgage rates
continue to decline this year,” she added.
Meanwhile, NAHB
Chief Economist Robert Dietz said that with future expectations of Fed rate
cuts in the latter half of 2024, NAHB is forecasting that single-family starts
will rise about 5% this year.