NAHB housing market index slips to 72 in January, as expected
Sentiment among US housebuilders deteriorated a little as expected in January, according to data released on Wednesday.
The National Association of Home Builders/Wells Fargo housing market index fell to 72 from December's 18-year high of 74, in line with analysts' expectations.
The component gauging current sales conditions dropped one point to 79, while the component charting sales expectations in the next six months fell one point to 78 and the index measuring buyer traffic declined four points to 54.
NAHB chairman Randy Noel said: “Builders are confident that changes to the tax code will promote the small business sector and boost broader economic growth. Our members are excited about the year ahead, even as they continue to face building material price increases and shortages of labour and lots."
NAHB chief economist Robert Dietz said: "The HMI gauge of future sales expectations has remained in the 70s, a sign that housing demand should continue to grow in 2018. 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."
Pantheon Macroeconomics said the December index likely jumped in response to the tax cuts, so a correction in January was a good bet.
"Given the severe weather, it could easily have fallen further. Most of the dip was in the buyer traffic component - a sign that the bad weather hurt activity - which fell four points. Current and expected future sales both dipped only one point and remain
very elevated. With the trend in mortgage demand quite firm, we expect to see stronger housing market activity and construction over the next few months, but further weather-distorted numbers are likely over the next few weeks."