Homebuilders Remain Cautiously Confident

January 21, 2015

Builder confidence remained above a key benchmark, reflecting that most of the nation’s homebuilders view conditions in the new-home market positively, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index released this week.

Builder confidence this month fell one point to 57. However, this marks the third consecutive month the index has been in the upper 50s, meaning that most builders view new-home sales and sales expectations for the next six months as “good” than “poor.”

“January’s HMI reading is in line with our forecast as we head into the new year,” says NAHB Chief Economist David Crowe. “Steady economic growth, rising consumer confidence, and a growing labor market will help the housing market continue to move forward in 2015.”

The monthly index gauges builder perceptions in the current new-home market based on home sales, buyer traffic, and sales expectations. Overall, builders appear to be the most optimistic in the West, with sentiment there rising four points in January to 66, followed by a three-point gain to 57 in the Midwest, and a two-point increase in the Northeast to 47. The South posted the only regional drop in builder confidence in January, falling two points to 58.

Source: National Association of Home Builders