Home builder sentiment remains positive in February in the wake of the new tax law, and despite rising mortgage rates. The latest National Association of Home Builders/Wells Fargo Housing Market Index was at 72 points.
At the core of builder confidence are future sales expectations. This index rose to a peak level of 80 points, while the index measuring buyer traffic plateaued at 54, per CNBC. "With ongoing job creation, increasing owner-occupied household formation, and a tight supply of existing home inventory, the single-family housing sector should continue to strengthen at a gradual but consistent pace," said NAHB chief cconomist Robert Dietz.
"Builders are excited about the pro-business political climate that will strengthen the housing market and support overall economic growth," said NAHB chairman Randy Noel, a custom home builder from LaPlace, LA. "However, they need to manage supply-side construction hurdles, such as shortages of labor and lots and building material price increases," he added.
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