Builder Confidence Slightly Slumps

Jan 17, 2018

Builder confidence in the market for newly-built single-family homes started the year on a gloomy note by dropping two points to a level of 72 in January on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). January’s slippage followed the 18-year peak in the HMI set in December 2017.

“Builders are confident that changes to the tax code will promote the small business sector and boost broader economic growth,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Our members are excited about the year ahead, even as they continue to face building material price increases and shortages of labor and lots.”

“The HMI gauge of future sales expectations has remained in the 70s, a sign that housing demand should continue to grow in 2018,” said NAHB Chief Economist Robert Dietz. “As the overall economy strengthens, owner-occupied household formation increases and the supply of existing home inventory tightens, we can expect the single-family housing market to make further gains this year.”

All three HMI components were lower for January: the index gauging current sales conditions dropped one point to 79, the component charting sales expectations in the next six months fell a single point to 78 and the index measuring buyer traffic fell four points to 54. Amid the regional HMI scores, however, there was upward movement: The West rose two points to 81, the South upticked one point to 73, the Midwest also inched up a single point to 70 and Northeast climbed five points to 59.

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Phil Hall

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Jan 17, 2018

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