Homebuilder confidence increased for the first time in over a year, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
- M-O-M: Homebuilder confidence rose 4 points to an index of 35 for the first month of 2023.
- Y-O-Y: Homebuilder confidence is down 49 points when compared to January 2022.
Beat The Street. Economists had projected that the index would remain at the two-year low of 31.
Up Across The Board. All three components that make up the index were up for the month. Current conditions rose four points to 40, forecast for the next six months rose two points to 37, and the traffic of prospective buyers was up three points to 23.
South On Top. The South continues to lead all four regions thanks to a four-point jump to an index of 39 followed by the Northeast at 34(+2), the Midwest at 32 (+2), and the West at 29 (+4).
Analysis. Robert Dietz, NAHB Chief Economist, said this is a turning point. “While NAHB is forecasting a decline for single-family starts this year compared to 2022, it appears a turning point for housing lies ahead…In the coming quarters, single-family home building will rise off of cycle lows as mortgage rates are expected to trend lower and boost housing affordability. Improved housing affordability will increase housing demand, as the nation grapples with a structural housing deficit of 1.5 million units.”