U.S. NAHB housing market index likely to have dropped marginally in January

The U.S. NAHB Housing Market Index had risen in December, coming in at 75 – the highest level since 1999. This historic confidence shows that homebuilders intend to ramp up production, as long as they can find the lots and workers to do so.

All three components of the index had risen in December, driven by an eight point rise in buyer traffic. Growing buyer demand has been stoked by strengthening employment and income growth, as well as rising consumer sentiment. The low level of available for-sale inventory has created fierce competition among buyers, and that should increase as demand gains more momentum, noted Wells Fargo in a research report.

Builders have been selling homes about as quickly as they can construct them. According to Wells Fargo, buyer traffic is expected to continue to build this year, keeping builder confidence high while enjoying the insatiable buyer demand. Consensus expectations are that the NAHB Housing Market Index might have dropped marginally to 72 in January.

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