Analysts try to place the worst decline in US home builder sentiment since 1985 on weather. In February, the National Association of Home Builders (NAHB)/Wells Fargo sentiment index fell from 56 to 46, readings less than 50 are considered poor.
The weather impacted the South and Northeast regions and is said to have contributed to reduce home buyer traffic. However, purchases and sales expectations declined with builder confidence on both sides of the United States. “Significant weather conditions across most of the country led to a decline in buyer traffic last month,” NAHB Chairman Kevin Kelly said. Although remaining above the key 50-mark since June last year, the sentiment gauge has fluctuated and declined significantly after December’s print.
Other measures declined, as well. Six-month sales outlook declined from 60 to 54, while the current single-family home purchase index fell from 62 to 51. These were the weakest numbers since last May.
“While housing isn’t the screaming bargain that it was a year ago, it is still highly affordable in relation to household incomes and to alternative rental payment,” said Allan Merrill, CEO Beazer Homes USA Inc. Unfortunately, if that was the case, the numbers may have been better.
According to Freddie Mac, the national average mortgage rate is 4.28 percent.