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Home-Builder Confidence Dips in February
A measure of home-builder confidence dipped in February, a sign that the housing sector may continue to face headwinds in 2015.
An index of builder confidence in the market for new single-family homes fell by two points to a seasonally adjusted level of 55 in February from January’s reading of 57, the National Association of Home Builders said Tuesday. A reading over 50 means a majority of builders see conditions as generally positive.
Economists surveyed by The Wall Street Journal had expected the index would move up to 58 in February from January’s reading of 57.
Home-builder sentiment trended up last year before reaching a peak of 59 in September, its highest level since 2005. But that upward movement has faltered over the past few months.
Still, the sentiment index has remained above the 50-point threshold for eight consecutive months. The trade group attributed this month’s downturn to unusually high snow levels across the country.
”Solid job growth, affordable home prices and historically low mortgage rates should help unleash growing pent-up demand and keep the housing market moving forward in the year ahead,” said David Crowe, the trade group’s chief economist.
The NAHB index has traditionally tracked closely with single-family housing starts. But in recent years, the sentiment gauge has climbed much faster than the actual construction of homes has increased.
U.S. housing starts climbed 4.4% in December from a month earlier, the Commerce Department said last month. Builders broke ground on single-family homes at the fastest rate in more than six years, offering hope that the market is revving up after years of malaise.
The current-sales component of the NAHB index dipped one point to 61. The index measuring expectations for sales over the next six months held steady at 60. A gauge of traffic from prospective buyers decreased five points to 39.
On a regional basis, the three-month moving averages for the index improved the most this month in the West, but slipped in the Northeast, Midwest and South.
Several factors in the economy would appear to support stronger home sales in 2015.
Employers added the most jobs in 2014 than any year since 1999, and continued to hire steadily in January, the Labor Department said earlier this month. Lower unemployment typically brings more buyers into the housing market. The size of the labor force also grew, a sign that workers believe their job prospects have improved.
Interest rates on mortgage loans are still near historic lows, making home purchases more affordable. The average interest rate on a 30-year fixed rate mortgage was 3.69% last week, down from an average of 4.3% in February 2014, according to Freddie Mac.
Sales of previously owned homes, which account for roughly 90% of the U.S. market, rebounded somewhat in December after falling to a six-month low in November, the National Association of Realtors said last month. News Corp, owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.
Meanwhile, new home sales rose to their highest level in more than six years in December, the Commerce Department said last month.
But despite broad economic growth, the Federal Reserve has continued to signal concern in its policy statements about the sector’s “slow” recovery.
Source: http://whatreallyhappened.com/fr
