WASHINGTON (3/17/15)--Home-builder confidence retreated for the third consecutive month in February, as the National Association of Home Builders' monthly index dropped by 2 points to 53, the lowest reading since July (Economy.com March 16).
The drop was driven by the present single-family home sales subcomponent, which fell by three points to 58.
Optimism that sales will improve in the coming months also took a hit, as prospective homebuyer traffic slipped to a reading of 37 from 39, its lowest number since June.
The subcomponent for single-family sales over the next six months was unchanged, however.
"The composite index now rests at 53, still above the average of 48 since the series' inception in 1985," said John Weis IV, Moody's analyst (Economy.com). "Although homebuilders are not as exuberant as they were during the housing bubble, the index remains above the neutral threshold of 50, indicating that most homebuilders expect positive near-term housing market conditions."
Regionally, the South and the West continued to post declines in overall home-builder confidence, while the Northeast also declined, reversing the prior month's gains.
The Midwest, which recorded an 11-point drop the previous month, saw a 13-point gain in February, making it the most optimistic region in the nation.
"Regional volatility diminishes the impact of these gains, however, making it likely the Midwest will see a drop next month," Weis said.