The National Association of Home Builders (NAHB)/Wells Fargo housing market index for January slipped to 67, down two points from a downwardly revised December reading of 69. Economists polled by Bloomberg were expecting an index reading of 69.

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor. NAHB chairman Granger MacDonald noted that builders are optimistic that a new Republican Congress and President will improve the business climate for small businesses by streamlining and reforming regulations.

The current sales conditions sub-index for January fell from 75 to 72, and the sub-index that estimates prospective buyer traffic dipped a point, from 52 to 51. The sub-index measuring sales expectations for the next six months fell two points from 78 to 76.

The NAHB’s chief economist said:

NAHB expects solid 10% growth in single-family construction in 2017, adding to the gains of 2016. Concerns going into the year include rising mortgage interest rates as well as a lack of lots and access to labor.

In the NAHB’s regions, the three-month moving average index rose or held steady in all four regions. In the Northeast, the index rose two points to 52; it rose three points to 64 in the Midwest; and remained unchanged in the South and the West at 67 and 79, respectively.

The NAHB/Wells Fargo housing market index has remained in the 60-point range since June of 2015. Prior to mid-2013, the index had not risen to 50 since mid-2006.

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