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Builder confidence in the housing market is renewing, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The January Index reads 58; in December, it was 56. At 51 or higher, the general outlook is positive. 

“The gradual decline in mortgage rates in recent weeks helped to sustain builder sentiment,” said Randy Noel, chairman of the NAHB, in a statement. “Low unemployment, solid job growth and favorable demographics should support housing demand in the coming months.”

“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 Robert Dietz, chief economist at the NAHB. “Lower interest rates that peaked around 5 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.”

Source: National Association of Home Builders (NAHB)

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