US Homebuilder Confidence Slips in January, Remains Close to 8-Year High
Confidence among US homebuilders eased in January, but remained close to the eight-year high, as economic recovery continues to drive housing market expansion.
The Housing Market Index, courtesy of the National Association of Home Builders, fell one point to 56 in January after reaching an eight-year high the previous month. A median estimate of economists polled by Thomson Reuters called for 58. A reading above 50 is a sign the housing market is in good condition, whereas a reading below that level denotes otherwise.
“Following an unexpected jump last month, builder confidence has essentially leveled out and is holding at a solid level,” said NAHB Chairman and North Carolina home builder Rick Judson. “Many markets continue to improve and this bodes well for future home sales.”
Although rising mortgage rates have deterred some would-be buyers from snatching up real estate, lending rates remain at historically low levels. Lending rates, which have been rising since May 2013, were relatively unchanged for the week ending January 9. Combined with rising home prices and pent-up demand, home builders expect gradual recovery in 2014.
Builder confidence rose in the Northeast and West, but declined in the South and Midwest, the NAHB reported. The gauge of the six-month sales outlook eased from 62 to 60, while the measure for prospective builder traffic fell from 43 to 40.
A strengthening housing market is one of the major cornerstones of economic recovery. Pending sales of previously-owned homes rose at a slower rate than forecast in November, according to data released last month by the National Association of Realtors. The sale of new homes also eased in November, but remained close to October’s five-year highs, according to official figures released last month by the Commerce Department.
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