Home builder sentiment

The January NAHB home builder sentiment index rose 1 pt m/o/m to 47 and that was 2 pts above the estimate, though still below 50. The drag remains the Prospective Buyers Traffic which at 33 is still deep under 50. The Present mood rose 3 pts to 51 while the Expectations component fell 6 pts but still is optimistic at 60.

On one hand, the hopes are for “improved economic growth and regulatory environment” and on the other, “builders expressed concerns over how building material tariffs and costs and a larger government deficit would put upward pressure on inflation and mortgage rates.” The higher rates are not just a headache for buyers as “Land is expensive and financing for private builders remains costly.” On the regulatory side, local and state governments are where builders should really be looking to for relief.