US: Builder Confidence slips from historic high - Wells Fargo

The NAHB/Wells Fargo Housing Market Index (HMI) fell 2 points in January to a still-strong 72, explained analysts from Wells Fargo. They point out that the largest drop was in buyer traffic, which had surged the prior month on unseasonably mild weather.

Key Quotes: 

“The NAHB/Wells Fargo Housing Market Index (HMI) fell 2 points to 72 in January from its cycle high in December. Despite the drop, builder confidence at the start of 2018 is much stronger than it was at the start of last year. The return of winter weather caused prospective buyer traffic to fall back from its cycle high hit in December. Even with the drop, however, buyer traffic remains at a relatively high level.”

“The Northeast is the only region where builder confidence rose in January, but it was also the only region to see a drop in December. On a three-month basis all regions remain at a cycle high.

“Homebuilders remain exceptionally optimistic. Buyer traffic is strong and attitudes toward development are now more favorable. The rising costs of building materials and labor remains a concern but should not upend the strong momentum currently in place.”