Confidence among home builders rose for the second straight month in January as falling mortgage rates have encouraged some buyers to resume their home search. The National Association of Home Builders (NAHB) Housing Market Index climbed seven points to 44, and while this is still in contraction territory below the key breakeven level of 50, the reversal marks a positive sign heading into the spring buying season.
All three index components moved higher this month. Current sales conditions rose seven points to 48, while future sales expectations surged twelve points to 57, moving into positive territory for the first time since August. Buyer traffic was also up five points to 29.
What’s the bottom line? NAHB Chair Alicia Huey noted that, “Lower interest rates improved housing affordability conditions this past month, bringing some buyers back into the market.” Plus, 31% of builders surveyed reported that they’re still reducing prices to encourage sales, providing even more opportunities for buyers right now.