The builder’s confidence increased in January

by calculated risks 1/18/2023 10:05:00 AM

The National Association of Home Builders (NAHB) reported that the Housing Market Index (HMI) was at 35, up from 31 last month. Any number below 50 indicates that more builders view sales conditions as bad than good.

From NAHB: Signs of a Builder Confidence Booster A turning point for housing lies ahead

A modest decline in interest rates helped end a streak of 12 consecutive monthly declines in construction confidence levels, although sentiment remains in bearish territory as builders continue to grapple with rising construction costs, building materials supply chain disruptions, and affordability challenges.

Builder confidence in the newly built single-family home market rose in January by 4 points, to 35According to the National Association of Home Builders (NAHB) / Wells Fargo Housing Market Index (HMI) released today.

“The low point for construction sentiment in this cycle appears to have been hit in December, even as many builders continue to use a variety of incentives, including price cuts, to boost sales,” said NAHB Chairman Jerry Konter. Savannah, JA. “The rise in construction sentiment also means that the bottoms of the permit cycle and starts are likely close, and a rebound in homebuilding could occur later in 2023.”

“While NAHB expects a decline in single-family starts this year compared to 2022, a turning point in the housing sector appears to lie ahead,” said Robert Dietz, chief economist at NAHB. “In the coming quarters, construction of single-family homes will pick up from cycle lows as mortgage rates are expected to trend lower and housing affordability strengthens. Improving housing affordability will boost housing demand, as the nation grapples with a structural deficit In housing, it amounts to 1.5 million units.

All three HMIs posted gains for the first time since December 2021. The HMI that measures current sales conditions in January rose four points to 40, the component that plots sales forecasts in the next six months increased two points to 37 and the traffic measure for potential buyers increased three points to 23.

Looking at three-month moving averages of regional HMI results, the West posted a one-point gain to 27, the South flat at 36, the Northeast down four points to 33 and the Midwest down two points to 32.

Affirmations added

Click on the chart for a larger image.

This graph shows the NAHB index since January 1985.

This was above consensus expectations.

Potential Buyers Movement is still well below the break-even point of 23 (down from 50).

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *