After several months of declines, builder confidence jumped seven points to a level of 44 in January, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index.
NAHB credited the increase to lower interest rates as mortgage rates fell under 7%.
“Lower interest rates improved housing affordability conditions this past month, bringing some buyers back into the market after being sidelined in the fall by higher borrowing costs,” stated NAHB Chairman Alicia Huey. “Single-family starts are expected to grow in 2024, adding much needed inventory to the market. However, builders will face growing challenges with building material cost and availability, as well as lot supply.”
Confidence levels over 50 indicate more builders view conditions as good than poor.
