Homebuilder confidence in the U.S. saw a modest pullback in the month of January, according to a report released by the National Association of Home Builders on Wednesday.
The report said the NAHB/Wells Fargo Housing Market Index dipped to 67 in January after jumping to a revised 69 in December. Economists had expected the index to edge down to 69 from the 70 originally reported for the previous month.
The modest pullback by the housing market index came after it reached its highest level since July of 2005 in December.
Despite the drop by the index, the NAHB said builder confidence in the market for newly-built single-family homes remained on firm ground.
"Builders begin the year optimistic that a new Congress and administration will help create a better business climate for small businesses, particularly as it relates to streamlining and reforming the regulatory process," said NAHB Chairman Granger MacDonald.
The modest pullback by the housing market index reflected decreases by all three components that make up the index.
The component gauging current sales conditions fell to 72 in January from 75 in December, while the index charting sales expectations in the next six months dipped to 76 from 78.
The report said the component measuring buyer traffic also edged down to 51 in January from 52 in the previous month.
"NAHB expects solid 10 percent growth in single-family construction in 2017, adding to the gains of 2016," said NAHB Chief Economist Robert Dietz.
He added, "Concerns going into the year include rising mortgage interest rates as well as a lack of lots and access to labor."
On Thursday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of December.
Housing starts are expected to climb to a rate of 1.200 million in December after plummeting by 18.7 percent to a rate of 1.090 million in November.
by RTT Staff Writer
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