Home-builder sentiment stays very strong in February, NAHB says

Getty ImagesHomebuilder enthusiasm is on the rise.

The numbers: The National Association of Home Builders/Wells Fargo housing market index stayed at 72 in February. That's a very strong reading, and just slightly below December's cycle-high reading of 74, as any reading over 50 indicates "good" performance.

What happened: The component on sales expectations in the next six months rose two points to 80, the index measuring buyer traffic held steady at 54, and the component gauging current sales conditions dropped one point to 78.

The future sales expectations reading was the strongest since the recession.

The big picture: Home-builder sentiment is ebullient, though it should be pointed out that the enthusiasm is on a different magnitude than the gains in housing starts. With a strong jobs market and a limited supply of older houses on the market, the backdrop is strong for the builders. The builders however say they face constraints including shortages of labor and lots as well as building material price increases.

Also see: U.S. wholesale prices climb in latest sign of bubbling inflation, PPI finds

Over the last year, the SPDR S&P Homebuilders ETF XHB, +0.44% has gained nearly 22%, outpacing the S&P 500's 17.7% advance.