Homebuilder confidence in the U.S. improved for the third straight month in February, according to a report released by the National Association of Home Builders on Thursday.
The report said the NAHB/Wells Fargo Housing Market Index climbed to 48 in February from 44 in January. Economists had expected the index to rise to 46.
With the bigger than expected increase, the housing market index reached its highest level since hitting 50 last August.
“Buyer traffic is improving as even small declines in interest rates will produce a disproportionate positive response among likely home purchasers,” said NAHB Chairman Alicia Huey.
She added, “And while mortgage rates still remain too high for many prospective buyers, we anticipate that due to pent-up demand, many more buyers will enter the marketplace if mortgage rates continue to decline this year.”
The bigger than expected advance by the housing market index reflected increases by all three of the major component indices.
The index charting current sales conditions and the component gauging traffic of prospective buyers both climbed by four points to 52 and 33, respectively. Both indices reached their highest levels since August.
The component measuring sales expectations in the next six months also rose by three points to 60, reaching its highest level since June.
On Friday, the Commerce Department is scheduled to release its report on new residential construction in the month of January.
Housing starts expected to rise to an annual rate of 1.470 million in January from 1.460 million in December, while building permits are expected to increase to an annual rate of 1.510 million in January from 1.495 million in December.
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