Builders' confidence in the market for new single-family homes fell as the National Association of Home Builders' housing market index — a monthly gauge of builder sentiment — dipped to 56 in January from a revised 57 in December, first reported as 58.
Thomson Reuters' poll of economists predicted the index would be 58.
"Following an unexpected jump last month, builder confidence has essentially leveled out and is holding at a solid level," according to NAHB Chairman Rick Judson. "Many markets continue to improve and this bodes well for future home sales."
"Rising home prices, historically low mortgage rates and significant pent-up demand will drive a continuing, gradual recovery in the year ahead," said NAHB Chief Economist David Crowe. "However, 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."
Derived from a monthly survey that NAHB has been conducting for 25 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 slid to 62 from 63, the sales expectations index for the next six months dropped to 60 from 62; and the traffic of prospective buyers index decreased to 40 from 43.
