The index that monitors homebuilder confidence in the single-family home market plunged 10 points in February, driven downward by poor winter weather and an increasing shortage in skilled construction labor and available, ready-to-build lots. The index score of 46 is the first reading below 50 since May 2013; scores below 50 indicate more builders perceive conditions as poor than good.

Severe weather and growing concerns over the cost and availability of labor and lots caused the index measuring builder confidence in the single-family home market to post a 10-point drop to 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released February 18.

"Significant weather conditions across most of the country led to a decline in buyer traffic last month," said recently elected NAHB chairman Kevin Kelly. "Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor."

All three of the major HMI components declined in February. The component measuring current sales conditions fell 11 points to 51, the section gauging sales expectations in the next six months declined six points to 54, and the component measuring buyer traffic dropped nine points to 31.

"Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry," NAHB chief economist David Crowe said. "The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes."

Looking at three-month moving averages for regional HMI scores, the West was unchanged at 63 in February, the Midwest registered a one-point decline to 57, the South registered a three-point decline to 53 and the Northeast posted a four-point decline to 38.