U.S. NAHB homebuilder sentiment surges in December, housing activity to rise modestly in near term

The U.S. housing market index surged in December. The NAHB housing market index of homebuilder sentiment rose to 74 in December, the highest reading since July 1999. The index came in above expectations.

The rebound was widespread throughout the sub-components. The present and future expectations of single-family home sales were up by three and four points, respectively. The present expectations of single-family home sales rose to 81, while the future expectations rose to 79.

The index on prospective buyers’ traffic rose by eight points to 58, the most robust reading since early 1999. These forward-looking indicators, which have some predictive capacity of housing starts activity six months ahead, indicate towards a modest rise in housing activity in the near term, noted Barclays in a research report.

“In all, we continue to expect a steady and modest recovery in the housing sector”, added Barclays.

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