According to the National Association of Home Builders, builder confidence in newly built single-family homes just slipped again, and affordability is the main reason why. I'm Kathy Fedke, and this is Real Estate News for investors.

This is Real Estate News with Kathy Fedke. Builder sentiment fell in February for the second month in a row.

The National Association of Home Builders reports its housing market index dropped one point to 36.

Any reading below 50 means more builders see conditions as poor than good.

So at 36, confidence is still in negative territory.

So what's causing the drop? Well, affordability. Home prices remain high compared to incomes.

Land costs are elevated, construction costs are stubborn, and many buyers simply can't make the numbers

work. Builders say more buyers are

sitting on the sidelines, even though incentives are being offered. In fact, 36% of builders

cut prices in February. That's slightly lower than January, but the average price cut is still

about 6%. And incentives, well, they're everywhere. 65% of builders are offering some

kind of incentive, like rate buy downs or closing costs to help. That's the 11th straight month

that incentives have stayed above 60%. But even with those sweeteners, buyer traffic is weak.

The index measuring prospective buyer traffic fell to just 22. That's extremely low.

Current sales conditions held steady at 41, but expectations for the next six months dropped three points to 46.

That tells us builders are feeling less optimistic about what's ahead.

Regionally, confidence slipped almost everywhere.

The northeast and Midwest are tied at 43.

The south fell to 35 and the west dropped to 33.

So what does this mean for investors?

Well, first, new construction demand is softening.

That could ease future supply pressure, especially if builders pull back.

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