In the latest report from the National Association of Home Builders (NAHB), homebuilder confidence was down in February, after the November elections boosted the index to an 11-year high.
According to MarketWatch, the index fell 2 points to 65 in February, which puts it “solidly above” the 2016 average of 61 and in what the NAHB calls a “more normal range.”
Overall, economists had forecast an uptick to 68 in February. Readings over 50 signal improving conditions.
The three sub-components of the index were down in February, with the current sales condition gauge falling one point to 71, while the measure of sales expectations over the next six months slid 3 points to 73.
The component that gauges buyer traffic fell five points to 46, putting it back below the neutral line.
“In the near term, we expect a slight moderation in housing activity owing to higher mortgage rates, but the picture for 2017-18 remains one of modest trend improvement,” said Michael Gapen, an economist at Barclays.
“Overall, the forward-looking indicators – a good predictor of housing starts activity six months ahead – remain on a strong footing, and we continue to expect a steady, albeit modest recovery in the housing sector this year.”
The NAHB index does not sync perfectly with the pace of construction activity, but if builders have more favorable assessments of business conditions, it usually indicates a stronger pace of construction.
Recently, builders have been breaking ground on only about two-thirds of the number of homes as their long-term average even as housing shortages are driving up costs for renting and buying. The NAHB cites more expensive and scarcer lots and labor, as well as increased regulation, for the slower pace of construction.
As the Daily Business News covered recently, the NAHB has been supportive of the moves from the Trump administration, including the proposed rollbacks of Dodd-Frank.
“NAHB commends President Trump on his announcement to reform regulations in the Dodd-Frank Act that have hampered our nation’s housing recovery and slowed economic growth,” said NAHB Chairman Granger MacDonald.
“We support common-sense regulations to protect American consumers and preserve our nation’s banking system, however, the tight lending conditions created by Dodd-Frank are preventing too many home builders from receiving loans and restricting mortgage financing to credit-worthy borrowers.”
The Daily Business News, MHProNews and MHLivingNews have covered Dodd-Frank and its impact on the manufactured housing industry extensively, including the Consumer Financial Protection Bureau (CFPB). Their impact on affordable housing has, in essence, created a “Renter’s Nation”. ##
(Image credits are as shown above.)
Submitted by RC Williams to the Daily Business News for MHProNews.
