The National Association of Home Builders/Wells Fargo Housing Market Index declined to 75 in January, down only one point from December. The last two monthly readings mark the highest sentiment levels since July 1999.
NAHB Chairman Greg Ugalde noted that low interest rates and a healthy labor market combined with a need for additional inventory are setting the stage for further home building gains in 2020.
“With the Federal Reserve on pause and attractive mortgage rates, the steady rise in single-family construction that began last spring will continue into 2020,” said NAHB Chief Economist Robert Dietz. “However, builders continue to grapple with a shortage of lots and labor, while buyers are frustrated by a lack of inventory, particularly among starter homes.”
The HMI component measuring buyer traffic increased one point to 58, the highest level since December 2017. The component measuring current sales conditions fell three points to 81, and the component measuring sales expectations in the next six months held steady at 79.
Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 62, the Midwest increased three points to 66, and the West moved one point higher to 84. The South remained unchanged at 76.
Read the NAHB release.