10:00 AM EST, 02/18/2025 (MT Newswires) -- The National Association of Home Builders' monthly housing market index fell to a reading of 42 in February from 47 in January, compared with expectations for a smaller decrease to a reading of 46 in a survey compiled by Bloomberg as of 7:40 am ET.

The index was below a reading of 48 a year earlier and is at the lowest level since September 2024.

The readings for single-family sales, the six-month outlook and buyer traffic all decreased in the month.

"While builders hold out hope for pro-development policies, particularly for regulatory reform, policy uncertainty and cost factors created a reset for 2025 expectations in the most recent HMI," said NAHB Chairman Carl Harris. "Uncertainty on the tariff front helped push builders' expectations for future sales volume down to the lowest level since December 2023. Incentive use may also be weakening as a sales strategy as elevated interest rates reduce the pool of eligible home buyers."

The temporary pause on tariffs announced by the Trump Administration helped to prevent a larger decline in the index, NAHB Chief Economist Robert Dietz said in the report, but concerns about costs remained.

"With 32% of appliances and 30% of softwood lumber coming from international trade, uncertainty over the scale and scope of tariffs has builders further concerned about costs," said Dietz. "Reflecting this outlook, builder responses collected prior to a pause for the proposed tariffs on goods from Canada and Mexico yielded a lower HMI reading of 38, while those collected after the announced one-month pause produced a score of 44. Addressing the elevated pace of shelter inflation requires bending the housing cost curve to enable adding more attainable housing."

Data on January home building from the US Commerce Department will be released at 8:30am ET Wednesday.