By Vicki Needham - 02/18/14 11:49 AM EST
Unusually cold weather sapped homebuilder confidence in February, dragging down optimism to its lowest level since May.
Waves of snowstorms blanketing the country combined with the cost and availability of labor and lots led to a steep 10-point drop, to 46, on the National Association of Home Builders(NAHB)/Wells Fargo Housing Market Index (HMI), released Tuesday.
Index levels over 50 indicate greater optimism.
The housing market's recovery has been accelerating, but the economy appeared to go into a deep freeze as the weather presented challenges during the past couple of months.
All three of the major index components declined in February.
Current sales conditions fell 11 points, to 51, sales expectations in the next six months declined 6 points, to 54, and the component measuring buyer traffic dropped 9 points to 31.
"Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry," said David Crowe, the NAHB's chief economist.
"The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes."
Regionally, all four areas either dropped slightly, on a three-month average, or remained flat.
The West was unchanged at 63, while the Midwest posted a 1-point decline, to 57, and the South dropped 3 points, to 53, and the Northeast fell 4 points, to 38.