Builder Confidence Edges Up in February

Washington, DC, Feb. 17, 2010--U.S. home builders were slightly more confident this month that the housing market is recovering, according to a monthly survey released Tuesday by the National Association of Home Builders.

The NAHB/Wells Fargo housing market index rose two points to 17 in February after falling in December and January. The increase was the highest level since November and was in line with economists' expectations.

Two of the three components of the home builders' index improved in February. The index for current sales rose from 15 to 17 and the index for expected sales rose from 26 to 27; the index for traffic of prospective buyers was steady at 12.

At 17, the national sentiment index shows that about one-in-six builders think the market is good. The index has been below 50 for 46 straight months after peaking at 72 in June 2005. It bottomed at 8 a year ago.

Builders are heartened by the improvement in the jobs market, said David Crowe, chief economist for the builders.

However, "several limiting factors are still weighing down builder expectations, including the large number of foreclosed homes on the market, the lack of available credit for new and existing projects, and inappropriately low appraisals tied to the use of distressed properties as comps," Crowe said.