Optimism among US homebuilders weakens

Associated Press

U.S. homebuilders are feeling a bit less confident this month, reflecting a dimmer outlook for sales in the months ahead and fewer would-be buyers dropping by builders’ sales offices.

The surprising decline comes ahead of the spring home-buying season, which is traditionally builders’ busiest time of the year and helps set the pace for home construction.

The National Association of Home Builders/Wells Fargo builder sentiment index released Wednesday fell to 65 this month. That’s down two points from a revised reading of 67 in January. Analysts had been expecting an increase.

Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has been above 60 since September.

The latest reading marks the second decline in a row for the index, which reached the highest level in 11 years in December. The February number also fell shy of analyst predictions. They expected the index to hit 68, according to FactSet.

Builders’ view of sales now and over the next six months also fell, as did a gauge of traffic by prospective buyers.

Despite the pullback in this month’s builder confidence index and the potential setback of higher mortgage rates, builders’ overall outlook remains positive.