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\u00a0<\/strong>A new report from the National Association of Home Builders found a\u00a0modest drop in interest rates helped to end a string of 12 straight monthly declines in builder confidence levels, although sentiment remains in bearish territory as builders continue to grapple with elevated construction costs, building material supply chain disruptions and challenging affordability conditions.<\/p>\n Builder confidence in the market for newly built single-family homes in January rose four points to 35, according to the National Association of Home Builders (NAHB)\/Wells Fargo Housing Market Index (HMI) released Jan. 18.<\/p>\n \u201cIt appears the low point for builder sentiment in this cycle was registered in December, even as many builders continue to use a variety of incentives, including price reductions, to bolster sales,\u201d said NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Ga. \u201cThe rise in builder sentiment also means that cycle lows for permits and starts are likely near, and a rebound for home building could be underway later in 2023.\u201d<\/p>\n \u201cWhile NAHB is forecasting a decline for single-family starts this year compared to 2022, it appears a turning point for housing lies ahead,\u201d said NAHB Chief Economist Robert Dietz. \u201cIn the coming quarters, single-family home building will rise off of cycle lows as mortgage rates are expected to trend lower and boost housing affordability. \u00a0Improved housing affordability will increase housing demand, as the nation grapples with a structural housing deficit of 1.5 million units.\u201d<\/p>\n Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB\/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as \u201cgood,\u201d \u201cfair\u201d or \u201cpoor.\u201d The survey also asks builders to rate traffic of prospective buyers as \u201chigh to very high,\u201d \u201caverage\u201d or \u201clow to very low.\u201d Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.<\/p>\n All three HMI indices posted gains for the first time since December 2021. The HMI index gauging current sales conditions in January rose four points to 40, the component charting sales expectations in the next six months increased two points to 37 and the gauge measuring traffic of prospective buyers increased three points to 23.<\/p>\n Looking at the three-month moving averages for regional HMI scores, the West registered a one-point gain to 27, the South held steady at 36, the Northeast fell four points to 33 and the Midwest dropped two points to 32.<\/p>","protected":false},"excerpt":{"rendered":" \u00a0A new report from the National Association of Home Builders found a\u00a0modest drop in interest rates helped to end a string of 12 straight monthly declines in builder confidence levels, although sentiment remains in bearish territory as builders continue to … Continue reading