U.S. home builders are feeling less confident about their sales prospects ahead of the spring home-selling season, though they remain positive overall that the housing market will continue to improve this year.
The Associated Press reports the National Association of Home Builders/Wells Fargo builder sentiment index released today slipped to 58 this month, down three points from a revised reading of 61 in January.
The index had been hovering in the low 60s since June. Readings above 50 indicate more builders view sales conditions as good, rather than poor.
Builders’ view of current sales conditions and a measure of traffic by prospective buyers declined. But their outlook for sales over the next six months edged higher.
The latest readings come as the annual spring buying season ramps up. Typically, the season sets the pattern for residential hiring and construction for much of the rest of the year.
Several factors have builders feeling less optimistic this month, including heightened concerns of late about a slowdown in the global economy and its potential impact on the U.S., and rising costs for labor and ready-to-build land parcels.
Even so, the builders’ trade association continues to forecast modest growth for housing this year.
“Historically low mortgage rates, steady job gains, improved household formations and significant pent-up demand all point to a gradual upward trend for housing in the year ahead,” says David Crowe, the NAHB’s chief economist.
