2/16/2024 – MetroIntelligence Economic Update by P. DUFFY
MetroIntelligence Economic Update by P. DUFFY
February builder confidence rises to highest level since last August
Builder confidence in the market for newly built single-family homes climbed four points to 48 in February, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. The HMI index charting current sales conditions increased four points to 52, the component measuring sales expectations in the next six months rose three points to 60 and the component gauging traffic of prospective buyers increased four points to 33.
Builders reduce price cuts and sales incentives to move inventory
With mortgage rates now below 7% since mid-December, more builders are cutting back on reducing home prices to boost sales. In February, 25% of builders reported cutting home prices, down from 31% in January and 36% in the last two months of 2023. However, the average price reduction in February held steady at 6% for the eighth straight month. Meanwhile, the use of sales incentives is also diminishing. The share of builders offering some form of incentive dropped to 58% in February, down from 62% in January and the lowest share since last August.
Inflation tracker CPI rebounds to 0.3 percent in January and 3.1 percent year-on-year
The all-items CPI index rose 0.3% during January – the sharpest jump since last September – and was up 3.1% year-over-year. The ‘core’ index minus food and energy costs spiked up 0.4% during the month – the sharpest jump in months – and was up 3.9% year-over-year. Categories jumping the most year-over-year included transportation services (9.5%), shelter (6.0%) and food away from home (5.1%). Falling the most year-over-year were natural gas service (-17.8%), fuel oil (-14.2%) and gasoline (-6.4%).
