Homebuilder Confidence Drops as Outlook Dims for New Sales

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor.

The current sales conditions subindex remained unchanged in January at 62, and the sales expectations subindex fell four points to 60. The subindex that estimates prospective buyer traffic dropped from 46 to 44. This subindex has remained below 50 for months, although the NAHB reports that in many areas of the country buyer traffic continues to increase.

In the NAHB’s four regions, the three-month moving average index rose in the Midwest from 54 in December to 60 in January. In the Northeast the index fell three points to post a 43 index score, and the West dropped nine points, from 74 to 65. In the South, the index slipped three points to 55.

Last week the NAHB reported that its remodeling market index had reached a record high of 60. Future conditions in the remodeling market was also pegged at 60, up from 52 in December. The group said that all subcomponents, including both large and small remodeling projects, maintenance and repair, saw increases.

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