U.S. homebuilder sentiment in February remained near the highest level since 1999 as lower borrowing costs kept construction firms upbeat about sales prospects.
The National Association of Home Builders/Wells Fargo Housing Market Index in February edged down 1 point to 74, according to a report out Tuesday. Readings above 50 indicate more builders view conditions as good than poor, and the median estimate in a Bloomberg survey of economists called for the gauge to hold at 75.
The number underscores steady growth in residential construction that’s contributed to economic growth the last two quarters. Mortgage rates are hovering near a three-year low, making home purchases a bit more affordable even as asking prices remain elevated.
“Steady job growth, rising wages and low interest rates are fueling demand, but builders are still grappling with increasing construction and development costs,” NAHB Chairman Dean Mon, a builder from New Jersey, said in a statement.
All three components of the housing market index — current purchases, expected sales and prospective buyer traffic — eased 1 point in February. The overall gauge climbed in December to 76, the highest level since 1999.
Sentiment among builders in the South, the largest U.S. region, was the strongest on record. Confidence in the Northeast reached a 14-year high, while falling in the West and Midwest.