Builders' confidence in the market for new single-family homes paused after eighth straight increases the National Association of Home Builders' housing market index — a monthly gauge of builder sentiment — held at 47 in January.
This is the highest the index has been since April 2006.
Thomson Reuters' poll of economists predicted the index would grow to 48.
"Conditions in the housing market look much better now than at the beginning of 2012 and an increasing number of housing markets are showing signs of recovery, which should bode well for future home sales later this year," according to NAHB Chairman Barry Rutenberg. "However, uncertainties stemming from last month's fiscal cliff negotiations contributed to the pause in builder confidence and continuing discussions among policymakers related to spending cuts and the future of the mortgage interest deduction could put a damper on housing demand in the coming months."
"Builders' sentiment remains very close to the index's tipping point of 50, where an equal number of builders view conditions as good and poor, and fundamentals indicate continued momentum in housing this year," said NAHB Chief Economist David Crowe. "However, persistently tight mortgage credit conditions, difficulties in obtaining accurate appraisals and the ongoing stalemate in Washington over critical economic concerns continue to impede the housing recovery."
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
The current single-family home sales index held at 51, the sales expectations index for the next six months slid to 49 from 50, and the traffic of prospective buyers index rose to 37 from 36.
