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First Cut: January NAHB/Wells Fargo Housing Market Index turns slightly higher

The January NAHB/Wells Fargo Housing Market Index (HMI) managed to reverse the slide of the prior two months and rise 2 points to 58. The index components pointed to slightly better sales of single-family homes (63 versus 61), as well as slightly better expectations of single-family home sales in the future (64 versus 61). Buyer traffic was up negligibly (44 versus 43). The January headline suggests that builder optimism has settled down to a more moderate level after two strong years, but that it is not entirely erased in the present market.

Some of the modest improvement may be due to a downtick in mortgage interests rates which generally bodes well for the pace of sales, especially if it encourages buyers to lock in a lower rate after evidence that historic lows may not last forever.

Normally the HMI precedes the release of the data on housing starts and permits issued by one day. However, the partial federal government shutdown means those numbers will not be available.


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