Courtesy of the National Association of Home Builders.

Builder confidence in the market for newly built single-family homes surged in January as mortgage rates slid below 7%, the National Association of Home Builders reported.       

Specifically, the NAHB/Wells Fargo Housing Market Index (HMI) rose seven points to 44, its second monthly increase in a row. Any number over 50 indicates that more builders view conditions as “good,” rather than “poor.”     

The share of builders reducing home prices slid to 31% in January from 36% in the previous two months, representing the lowest level since August 2023, NAHB noted.   

The HMI is made up of three components, all of which gained ground in December. The component gauging current sales conditions rose seven points to 48, the gauge measuring sales expectations in the next six months jumped 12 points to 57, and the component measuring traffic of prospective buyers rose five points to 29.     

The three-month moving average for regional HMI scores was up in three of four regions, rising four points in the Northeast to 55, two points in the South to 41 and one point in the West to 32. It was flat at 34 in the Midwest.