Current conditions and expected conditions each dropped four points to 58 and 80 points respectively. The decline in current conditions was expected due to significant winter weather in February. Despite the declines, builders still rated overall market conditions well above the neutral level of 50, and expected conditions during the next six months were rated very strong. Traffic conditions had the best showing in February with a five-point jump to 46. That followed a 15-point improvement in January.

Builder sentiment regarding the single-family attached market were a bit more subdued, however. The HMI reading for attached homes came in at 49 for February, a seven point drop. Readings for the attached home market have declined since last summer and have lagged the detached market for several months.

The current conditions component slumping 11 points to 47. Expected conditions remained strong with a February index of 67, however this represents a decline of eight points last month and trails the detached market’s expected conditions component by 13 points.

Builders of multi-family for-sale homes registered the weakest overall ratings in February. The multi-family HMI index reading came in at 35, down 13 points from January. Current conditions were off 20 points to a reading of 30, while expected conditions fell 15 points to 35.

Weakness in the attached and multi-family markets lowered the All Markets HMI reading to 54, a four-point drop from January. Overall, current conditions declined four points and expected conditions fell six points. Only the traffic component of the index was up at 46.

While winter weather has dampened current sales conditions somewhat, it is clear that optimism for the first of 2004 is quite strong, particularly in the single-family detached market.