U.S. homebuilder confidence suffered its largest one-month drop ever in the month of February, falling below the key 50 mark for the first time since May.
The National Association of Home Builders blamed winter’s severe weather and concerns about the costs of labor and building lots, perhaps ironic considering the president’s push for both global warming regulations and a hike in the minimum wage.
The NAHB/Wells Fargo Housing Market Index plummeted by 10 points to 46 in February, down from 56 in the month of January.
“Significant weather conditions across most of the country led to a decline in buyer traffic last month,” the Washington-based industry group’s chairman, Kevin Kelly, said in a statement. “Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor.”
Readings below 50 show more builders have a negative opinion of housing market conditions, viewing them as poor rather than favorable.
“Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry,” NAHB Chief Economist David Crowe said in the same statement from the group. “The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes.”
All three of the index’s major components fell in the month of February.
The survey’s index on homebuilders’ views on current sales conditions fell 11 points to 51, which is the lowest level since May, down from 62 in January.
The gauge of expectations for single-family home sales for the next six months dropped 6 points to 54, what is a nine-month low down from 60 the month prior.
The component on prospective buyer traffic took a 9-point hit down to 31 from 40 in January. February’s level was the lowest since April, when it came in at 30.
The markets were shaken on homebuilder confidence data that followed the Empire State’s manufacturing index showing that sector took a beating in the month, as well.