Although buyer traffic and expected sales have weakened for home builders, current sales are strong enough to help the sector maintain confidence.
A measure of home builder sentiment, the National Association of Home Builders/Wells Fargo Housing Market Index, came in at 60 this month.
The index actually fell from 61 previously reported for December. But last month’s index was revised to 60
— leaving no month-over-month change.
An index in excess of 50 indicates that there are more builders who consider current conditions good than those who don’t.
“January’s HMI reading is right in line with our forecast of modest growth for housing,” NAHB Chief Economist David Crowe said in a written statement. “The economic outlook remains promising, as consumers regain confidence and home values increase, which will help the housing market move forward.”
In the Northeast, a three-month moving average for the index was down a point from December to 49. The midwest index was off a point to 57, and the index in the West was also down one point to 75.
In the South, the moving average for the index dropped two points to 61.
One of three components in the national index, current sales, was 67 in January, up two points from a month earlier. The index suggests that current single-family home sales are strong.
A second component, sales expectations for the next six months, was 63. This component’s index was off three points from December.
The third component,
which measures buyer traffic, was down two points from December to 44.
