US Builder Sentiment Improves in January

On Wednesday (1-18-23), the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reported that builder sentiment in the market for newly built single-family homes rose 4 points in January to a reading of 35. The increase brings the string of 12 consecutive months of builder sentiment declines to an end. However, any reading below 50 indicates that more builders view conditions as poor rather than good.

All three HMI components posted gains in January, the first time since December 2021. Current sales conditions increased 4 points to a reading of 40. The component charting sales expectations in the next six months rose two points to a reading of 37. The gauge that measures traffic of prospective buyers improved three points to a reading of 23.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell 4 points to a reading of 33; the Midwest dropped 2 points to a reading of 32; the South held steady at a reading of 36; and the West posted a one-point gain to a reading of 27.