Builder Confidence Levels Out in January

The ""National Association of Home Builders'"":http://www.nahb.org/default.aspx (NAHB) ""Housing Market Index"":http://www.nahb.org/news_details.aspx?newsID=16612 (HMI) experienced a slight stumble in January, dipping a point from December as builders expressed falling confidence in the single-family market.

[IMAGE]

The HMI, a gauge of homebuilder confidence released monthly by NAHB and ""Wells Fargo"":https://www.wellsfargo.com/, dropped to 56 in January from December's revised reading of 57. A score above 50 indicates more builders think the market is good rather than poor.

""Following an unexpected jump last month, builder confidence has essentially leveled out and is holding at a [COLUMN_BREAK]

solid level,"" said NAHB chairman Rick Judson. ""Many markets continue to improve and this bodes well for future home sales.""

NAHB's ""Leading Markets Index"":https://themreport.com/articles/more-than-one-third-of-metros-performing-90-pre-crisis-levels-2014-01-09, released earlier in January, saw a growth in the number of markets returning to their pre-crisis levels of home prices, housing permits, and employment numbers--signaling to builders that more homebuyers may soon arrive to the market.

Despite the market's gains, NAHB chief economist David Crowe noted ""the pace of the recovery could be stronger were it not for rising construction costs and inaccurate appraisals that are keeping some home sales from going through.""

All three components of the HMI fell in January: The index gauging current single-family sales conditions slipped one point to 62, the index gauging expectations for sales six months out dropped to 60, and the measure for prospective buyer traffic fell to 40.

NAHB reported improved confidence in two regions: The Northeast, which saw its index rise two points to 42, and the West, where confidence rose to an index reading of 71--the highest in that region since February 2006. Meanwhile, confidence fell to a reading of 60 in the Midwest and 53 in the South.