The National Association of Home Builders (NAHB) reported that the United States Home Builder Confidence Index rose four points to 35 in January, marking the first increase in over a year. This is above analysts’ expectations of 31, following 12 consecutive months of declines.
The sentiment index was supported by slowing mortgage interest rates and a rebound in the index of future sales expectations for the second month. However, the confidence index remained below 50, indicating a negative outlook for the housing market.
NAHB Chief Economist Robert Dietz stated, “While NAHB is forecasting a decline for single-family starts this year compared to 2022, it appears a turning point for housing lies ahead. In 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.”
This report highlights a possible improvement in the housing market, but also emphasizes the ongoing challenges facing home builders. The NAHB will continue to monitor the situation and provide updates on the state of the housing market.