U.S. Home-Builder Sentiment Rose in January, Signaling Turning Point -- NAHB

By Xavier Fontdegloria

U.S. home builders' confidence improved in January for the first time in more than a year, although sentiment remained subdued amid the current housing market downturn, data from the National Association of Home Builders showed Wednesday. Here are the report's main takeaways:

--The NAHB's housing-market index--which gauges the single-family housing market--rose to 35 in January from 31 in December, well below the 50 threshold and indicating that more builders view conditions as poor rather than good. This is the first monthly increase in confidence since December 2021.

--Economists polled by The Wall Street Journal expected the index to fall to 30.

--"It appears the low point for builder sentiment in this cycle was registered in December, even as many builders continue to use a variety of incentives, including price reductions, to bolster sales," NAHB Chairman Jerry Konter said. The rise in builder sentiment means cycle lows for housing permits and starts are likely near, and a rebound for home building could be under way later in 2023, he said.

--Single-family home building will rise off of cycle lows in the coming quarters as mortgage rates are expected to trend lower and boost housing affordability, NAHB Chief Economist Robert Dietz said. "It appears a turning point for housing lies ahead," he said.

--The index measuring current sales conditions rose four points, to 40. Sales expectations in the next six months increased two points, to 37, and the measure gauging traffic of prospective buyers edged up three points, to 23. Despite the gains, all three indicators stand below 50, meaning that builders see current and expected sales as "poor" while the traffic of prospective buyers is "low to very low."

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(END) Dow Jones Newswires

01-18-23 1014ET