Builder confidence held steady for the second month in a row after a six-month slide, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index, released today.

The January index of 57 is above the midpoint of 50.

Derived from a monthly survey that NAHB has been conducting for about 20 years, the index gauges builder perceptions of single-family home sales and sales expectations for the next six months as either “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as either “high to very high,” “average” or “low to very low.”

Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

“Housing markets across the country have cooled, as predicted, and builders are aware that some slowing in demand is inevitable following the record-breaking sales for the past three years,” said David Pressly, NAHB president and a builder and developer from Statesville, N.C.

“While the recent decline in mortgage rates helped buoy builders’ confidence, they are adjusting to the changes they are seeing and hearing in their sales offices,” Pressly said in a statement.

David Seiders, NAHB chief economist, added, “Single-family housing affordability has been eroded by the accumulation of large house-price increases in recent years, but some softening of long-term interest rates since the early-December survey helped to buoy builder attitudes. This has been bolstered by the fact that consumer confidence has rebounded nicely from post-Hurricane Katrina lows.”

Two of the HMI’s component indexes were unchanged for the month. The third component – the index gauging current sales – edged down two points to 62. The index gauging sales expectations for the next six months held at 65, and the index gauging traffic of prospective buyers remained at 40. All three components are down 15 points from their June 2005 highs.

Builder confidence was down across three regions of the country, with the West slipping from a high level on the confidence scale to one more on par with the South, the home builder association announced. In the West, the index fell from 75 in December to a still-impressive 65 in January, while in the South, the HMI slipped a point to 66. In the Northeast, the gauge slipped three points to 56, while the index in the Midwest increased from 34 to 36.

The National Association of Home Builders trade group that represents about 225,000 members involved in home-building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction.


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 137.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription