Home builder confidence slipped in January, in part on lower expectations for future sales, according to a trade group.
The reading on the National Assn. of Home Builders/Wells Fargo Housing Market Index fell one point from December to 56 this month. December's rate was also revised down one point.
Still, confidence among U.S. builders remains high, as new home sales have been strong recently. A level higher than 50 means more builders see the market for new, single-family homes as good rather than poor.
“Following an unexpected jump last month, builder confidence has essentially leveled out and is holding at a solid level,” NAHB Chairman Rick Judson said in a statement. “Many markets continue to improve and this bodes well for future home sales.”
All three measures tracked by the association fell to start the year. Current sales conditions fell one point; expectations for future sales fell two points; And a gauge of home buyer traffic dropped three points.
“The pace of the recovery could be stronger were it not for rising construction costs and inaccurate appraisals that are keeping some home sales from going through,” NAHB chief economist David Crowe said in a statement.
But Crowe cited three things that he said would propel a continued, gradual recovery this year: heavy pent-up demand, rising home prices and mortgage rates that are still low historically.