Builder confidence in the market for newly built, single-family homes continued to climb for a fourth consecutive month in January, rising four points to 25 on the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This is the highest level the index has attained since June 2007.
Each of the HMI's three component indices registered a fourth consecutive month of improvement in January. The component gauging current sales conditions rose three points to 25, which was its highest point since June 2007. The component gauging sales expectations in the next six months also rose three points, to 29 – its highest point since September 2009. And the component gauging traffic of prospective buyers rose three points to 21, its highest point since June 2007.
The HMI also posted gains in all four regions in January, including a nine-point gain to 23 in the Northeast, a one-point gain to 24 in the Midwest, a two-point gain to 27 in the South and a five-point gain to 21 in the West.
‘Builder confidence has now risen four months in a row, with the latest uptick being universally represented across every index component and region,’ says Bob Nielsen, NAHB chairman and a home builder from Reno, Nev. ‘This good news comes on the heels of several months of gains in single-family housing starts and sales, and is yet another indication of the gradual but steady improvement that is beginning to take hold in an increasing number of housing markets nationwide. Policymakers must now take every precaution to avoid derailing this nascent recovery.’