January Builder Confidence Holds Steady

Builder confidence for newly-built single-family homes held steady at 60 in January, the National Association of Home Builders reported yesterday.  

The NAHB/Wells Fargo Housing Market Index said the January reading matched a downwardly revised December reading. The HMI component gauging current sales condition rose two points 67 in January. The index measuring sales expectations in the next six months fell three points to 63, while the component charting buyer traffic dropped two points to 44.  

All four regions registered slight declines. The Northeast, Midwest and West each posted a one-point decline to 49, 57 and 75, respectively, while the South fell two points to 61.  

“The index has trended lower over the past three months and has fallen five points from its post-recession high of 65 in October,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “A possible explanation for the slowdown is smaller home builders’ continued frustration over their inability to secure affordable lots or hire sufficient labor.”  

A number over 50 indicates that more builders view conditions as good than poor.   “The economic outlook remains promising, as consumers regain confidence and home values increase, which will help the housing market move forward,” said NAHB Chief Economist David Crowe.   “Despite the modest slowdown, the NAHB index remains at a healthy level and is consistent with our forecast for modest gains in housing,” Vitner said.