A steady level for the housing market index in January marks a strong beginning of the year for builders of new, single-family homes in the U.S. This is a continuation of an eight-month gradual climb back to stability for the housing market that has brought figures to the highest levels since April 2006.
Housing Market Index
January: Fiscal Cliff and Other ‘Uncertainties’
The housing market index, a survey designed by the National Association of Home Builders (NAHB) and Wells Fargo to measure builder confidence and sales expectations in the industry, has remained at around 50, close to the same levels as last month. Builders’ views on the market appear to be divided between good and poor. Much of the confidence was shaken by last month’s fiscal cliff negotiations, as well as ongoing policy discussions regarding spending cuts and mortgage interest deductions.
Nevertheless, NAHB chairman Barry Rutenberg points out that if the numbers are any indication, the future of the housing market is looking bright this year. ( Add this as a strong statement for the opening) This is further supported by the gradual improvement shown by many markets in the industry, signaling slow but certain recovery.
Housing Market Index: Other Numbers
In spite of the seemingly cautious views of the steadiness of the numbers, the survey showed promise overall for the housing market in the next six months. Several additional figures in the housing market index for January are worth noting:
- The current sales condition component of the HMI remained at 51, unchanged from last month.
- The component measuring sales expectations in the housing market for the next six months fell one point to 49.
- The prospective buyer traffic component gained one point from last month, rising to 37.
- At 36 and 50, respectively, the Northeast and Midwest regions posted two-point gains for the HMI three-month moving average. The South gained three points for a total of 49, while the West posted the largest increase at four points to 51.
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