Home builder confidence drops in February

Home builder confidence slipped a bit in February, the National Association of Home Builders said Tuesday.

The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) slid one point from January, to 46, the NAHB said.

"Following solid gains over the past year, builder confidence has essentially leveled out," said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. "This is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit, but it's also a reflection of the fact that builders are now confronting rising costs for building materials and, in some markets, limited availability of labor and lots as demand for new homes strengthens."

Nevertheless, the index remains near its highest level since 2006, and "we expect home building to continue on a modest rising trajectory this year," said NAHB Chief Economist David Crowe.

The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months. A figure above 50 indicates that more builders see conditions as good than poor.

In the latest report, the current sales index fell a single point in February, to 51; the sales expectations index rose one point to 50; but the index of prospective buyer traffic fell four points to 32.