Yesterday, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing that assessments of housing activity worsened significantly in February with the composite HMI index falling to 46 while the "buyer traffic" index declined to a level of 31.This pullback is severe and while many are suggesting that inclement weather is responsible, only time will tell if this is the beginning of an ongoing downtrend for new construction or just a momentary pause.
Looking at the data, it is fairly clear that the last year of results indicate a major change in builder sentiment likely coming as a result of improvements in confidence given the notable rise in buyer traffic, reduced inventory and a more balanced monthly supply.
