We’ve all grown pretty accustomed to weaker than expected housing data over the last several months, but this morning we got some positive news as homebuilder sentiment not only improved in February but also came in higher than expected. According to the NAHB, homebuilder sentiment improved from 58 up to 62 and was three points ahead of consensus expectations. For some perspective, the last time homebuilder sentiment saw an m/m increase of four points was in December 2017.

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The table below breaks down this month’s report by present and future sales (both increased), traffic (increased), as well as regional sentiment (mixed). Future Sales sentiment saw the largest increase this month, followed by Traffic and Present Sales. On a regional basis, both the Midwest and South saw strong gains, while the West and Northeast saw declines.

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While this month’s improvement is welcome, looking at the steep drops we saw over the course of 2018, the general downtrend in sentiment remains intact. In order to indicate a meaningful change in sentiment on the part of homebuilders, it’s going to take a couple of more months of similar reports.

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