Confidence among builders in the U.S. housing market increased more than expected in February as a recent decline in mortgage rates helps to stoke buyer demand.

The National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, rose 7 points to 42, the highest reading since September and the largest one-month gain since June 2013.

Any reading above 50 is considered positive; prior to 2022, the gauge has not entered negative territory since 2012, excluding a brief – but steep – drop in May 2020. 

The index has fallen to half of what it was just one months ago, when it stood at 81, although it has increased from a low of 31. It peaked at a 35-year high of 90 in November 2020, buoyed by record-low interest rates at the same time that American homebuyers – flush with cash and eager for more space during the pandemic – started flocking to the suburbs. 

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