(Bloomberg) -- Sentiment among U.S. homebuilders rose in February for a second month, exceeding all forecasts, as lower mortgage rates and a strong labor market help stabilize demand.

The National Association of Home Builders/Wells Fargo Housing Market Index rose to 62 from 58 amid broad improvement on gauges of sales, expectations and buyer traffic, data released Tuesday showed. The median estimate in Bloomberg’s survey had called for a rise to 59. Readings above 50 indicate more builders view conditions as good than poor.

Key Insights

Official’s View

“Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment,” NAHB Chairman Randy Noel, a custom-home builder from Louisiana, said in a statement. “In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season.”

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• Two of four geographic regions improved. The Midwest gauge rose 6 points while the South’s climbed 5 points, both posting the largest gains since late 2017.
• The report is the second in a row to show gains for all three main index components.

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