The National Association of Homebuilders (NAHB)/Wells Fargo housing market index fell by a point in February to 46. The January reading was the highest for the index since April 2006. An index reading below 50 indicates that more builders view sales conditions as poor than view them as good. The reading was slightly below an expected reading of 48.

The NAR’s chairman noted:

Following solid gains over the past year, builder confidence has essentially leveled out and held in the same three-point range over the last four months. This is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit, but it’s also a reflection of the fact that builders are now confronting rising costs for building materials and, in some markets, limited availability of labor and lots as demand for new homes strengthens.

Subindexes that measure current sales conditions and sales expectations came in at 51 and 50 in February. The subindex that estimates traffic of prospective buyers fell four points to 32.

The NAHB index remains below 50 and has turned south. Given the concerns about future prospective buyers, it is not unrealistic to think that maybe the housing market reemergence will not save us all yet. Inventories remain low and are not growing at anything like pre-crash rates. Housing could turn out to be more sluggish than many are predicting for 2013.

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