Housing market index inches higher in February
* The National Association of Home Builders' Housing Market Index rose 1 point to 20 from 19 in January. That is still down sharply from 39 a year ago, but it is the highest reading since September 2007.
* The subindex measuring present single-family home sales rose 1 point to 20, while the subindex measuring expectations about future sales dipped 1 point to 27. The big change was in the subindex measuring prospective buyer traffic -- it popped up 5 points to 19.
* Regionally, the HMI was up 3 points to 24 in the Northeast, up 2 points to 24 in the South, and up 2 points to 15 in the West. In the Midwest, the index was unchanged.
Builders haven't had much reason for optimism lately. But an uptick in buyer traffic in February could be one bright spot in a sky full of dark clouds. The well-publicized Federal Reserve interest rate cuts, coupled with some of the government stimulus efforts targeted at the mortgage industry, may have encouraged some buyers to check out what's available. Aggressive discounting may be another potential driver of traffic.
Still, we're talking about an index that remains at extremely depressed levels even after this recent bounce. Moreover, tighter mortgage market conditions will make it harder for some potential buyers to actually close. Bottom line: I would need to see a sustained period of notable improvement in several indicators before getting too excited about the housing market's prospects.