U.S. Homebuilder Confidence Shows Modest Deterioration In January

(RTTNews) - Homebuilder confidence in the U.S. has seen a modest deterioration in the month of January, according to a report released by the National Association of Home Builders on Tuesday.

The report said the NAHB/Wells Fargo Housing Market Index edged down to 57 in January from an upwardly revised 58 in December.

Economist had expected the housing market index to inch up to 58 from the 57 originally reported for the previous month.

Despite the modest decrease, the NAHB noted that the index remained above 50 for the seventh straight month, indicating that more builders view conditions as good than poor.

"January's HMI reading is in line with our forecast as we head into the new year," said NAHB Chief Economist David Crowe. "Steady economic growth, rising consumer confidence and a growing labor market will help the housing market continue to move forward in 2015."

The drop by the housing market index was partly due to a notable decrease by the component measuring expectations for future sales, which fell to 60 in January from 64 in December.

The component gauging traffic of prospective buyers also fell to 44 from 46, while the component gauging current sales conditions remained unchanged at 62.

Peter Boockvar, managing director at the Lindsey Group, "The NAHB doesn't break out the builder sentiment among states (just regions) but it's very likely that builders in Texas, Louisiana, Oklahoma, and North Dakota must be reigning in expectations."

"On the flip side, another leg lower in mortgage rates and continued improvement in the amount of jobs (ex energy) that are being created should give a lift to new home sales, alongside persistent increases in the cost of renting, which we know has siphoned off a lot of new households," he added.

Wednesday morning, the Commerce Department is scheduled to release a separate report on new residential construction in the month of December.

Economists expect housing starts to climb to an annual rate of 1.041 million in December from 1.028 million in November.