US housebuilder confidence unexpectedly dipped in February as homebuyer traffic declined even as the country’s housing sector staged a nascent recovery.
The National Association of Home Builders/Wells Fargo index of builder confidence fell to 46 from 47, its highest level since April 2006. Economists had expected a rise to 48.
The index is based on a survey in which housebuilders are asked to rate the general economy and housing market conditions.
Economists said sentiment may have been temporarily affected by the severe winter weather, particularly in the northeast, that caused many potential homebuyers to stay indoors.
“The February dip was due entirely to a four-point decline in the buyer traffic index, which could well reflect the impact of the massive snowstorm, which hit the northeast a couple of weeks ago; the number is likely to rebound in March,” said Ian Shepherdson, chief economist at Pantheon.
Cooper Howes, economist at Barclays, said: “Despite the decline, however, the index remains above its six-month average of 44 and stands 18 points higher than its year-ago level.”
Although 2012 was a good year for US housing with builders ramping up home construction to meet renewed demand for homes, industry watchers say the sector will still take time to accelerate.
Rick Judson, NAHB chairman, attributed the monthly decline in homebuilder confidence to broader economic issues.
“[The decline] is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit,” said Mr Judson.
While record-low mortgage rates have spurred some homebuyers to move ahead with purchases, many are still unable to qualify and meet the tough credit conditions. Homebuilders have been cautious about building speculatively and adding more stock without the demand.
“Builders are now confronting rising costs for building materials and, in some markets, limited availability of labour and lots as demand for new homes strengthens,” he said.
Although homebuilder sentiment has risen on the back of increasing demand for new homes, the index has yet to cross the crucial 50 mark, where equal numbers of builders view conditions as good and poor.
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