Tuesday, January 19, 2016

NAHB: Builder Confidence unchanged at 60 in January

by Bill McBride on 1/19/2016 10:05:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 60 in January, unchanged from December (revised). Any number above 50 indicates that more builders view sales conditions as good than poor.

From the NAHB: Builder Confidence Holds Firm in January

Builder confidence in the market for newly-built single-family homes held steady at 60 in January from a downwardly revised December reading of 60 on the National Association of Home Builders/Wells Fargo Housing Market Index.

“After eight months hovering in the low 60s, builder sentiment is reflecting that many markets continue to show a gradual improvement, which should bode well for future home sales in the year ahead,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

“January’s HMI reading is right in line with our forecast of modest growth for housing,” said NAHB Chief Economist David Crowe. “The economic outlook remains promising, as consumers regain confidence and home values increase, which will help the housing market move forward.”
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The HMI component gauging current sales condition rose two points 67 in January. The index measuring sales expectations in the next six months fell three points to 63, and the component charting buyer traffic dropped two points to 44.

Looking at the three-month moving averages for regional HMI scores, all four regions registered slight declines. The Northeast, Midwest and West each posted a one-point decline to 49, 57 and 75, respectively, while the South fell two points to 61.
emphasis added
HMI and Starts Correlation Click on graph for larger image.

This graph show the NAHB index since Jan 1985.

This was below the consensus forecast of 62, but still a strong reading.