US Builder Sentiment Up for Second Consecutive Month in February

On Wednesday (2-15-23), the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reported that builder sentiment in the market for newly built single-family homes increased 7 points in February to a reading of 42. This marks the second consecutive month of gains and the strongest reading since September 2022. However, any reading below 50 indicates that more builders view conditions as poor rather than good.

All three HMI components posted gains in February. The HMI for current sales conditions increased six points to a reading of 46. The component charting sales expectations in the next six months rose eleven points to a reading of 48. The gauge that measures traffic of prospective buyers improved six points to a reading of 29.

According to the three-month moving averages for regional HMI scores, the Northeast rose four points to a reading of 37; the Midwest was up one point to a reading of 33; the South increased four points to a reading of 40; and the West posted a three-point gain to a reading of 30.