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The National Association of Home Builders (NAHB)/Wells Fargo housing market index (HMI) for February remained unchanged at 72, down two points from an 18-year high of 74 in December. Economists polled by Bloomberg were expecting an index reading of 72.

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor. NAHB Chairman Randy Noel said that while builders are upbeat they “need to manage supply-side construction hurdles, such as shortages of labor and lots and building material price increases.”

The current sales conditions subindex for February dipped from 79 to 78, and the subindex that estimates prospective buyer traffic was unchanged at 54. The subindex measuring sales expectations for the next six months rose by two points from 78 to 80.

NAHB’s chief economist, Robert Dietz, said:

The HMI gauge of future sales expectations has reached a post-recession high, an indicator that consumer demand for housing should grow in the months ahead. With ongoing job creation, increasing owner-occupied household formation, and a tight supply of existing home inventory, the single-family housing sector should continue to strengthen at a gradual but consistent pace.

In the NAHB’s regions, three-month moving average indexes rose in two of four. In the Midwest the index rose two points to 72, and the South saw a one-point increase to 74. The index was unchanged at 81 in the West and fell by two points to 56 in the Northeast.

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