All the HMI indices were on the rise for this month: The index measuring current sales conditions inched up two points to 63, the component gauging expectations in the next six months rose by three points to 64 and the metric charting buyer traffic had a one-point uptick to 44. Looking at the three-month moving averages for regional HMI scores, the Northeast dropped five points to 45 while the Midwest and South both fell three points to 52 and 62, respectively, only and the West took a one-point drop to 67.
The NAHB noted that the partial federal shutdown cancelled the scheduled release of U.S. Census Bureau statistics on housing starts and permits, but the trade group estimated that the data would have shown single-family starts ended 2018 totaling 876,000 units, a 3 percent gain over the 2017 total of 848,900. However, the slowing of sales during the fourth quarter left new home inventories elevated in some markets.
“Builders need to continue to manage rising construction costs to keep home prices affordable, particularly for young buyers at the entry-level of the market,” said NAHB Chief Economist Robert Dietz. “Lower interest rates that peaked around five percent in mid-November and have since fallen to just below 4.5 percent will help the housing market continue to grow at a modest clip as we enter the new year.”