Homebuilder sentiment falls for second month in a row

Index tracking sentiment is still up year-over-year

National /
Jan.January 20, 2021 01:15 PM
(iStock)

(iStock)

Homebuilder sentiment fell again as 2021 got underway.

The National Association of Home Builders/Wells Fargo Housing Market Index this month decreased to 83, seasonally adjusted, compared to December’s reading of 86.

January’s reading is the second consecutive month the index has reported a month-over-month decline. The prior month’s reading was the first time since April that the index saw a decline.

Homebuilder sentiment was also lower when it came to current single-family sales, with a reading of 90. The outlook for home sales in six months time dropped to 83, while the outlook for buyer traffic fell to 68.

The index tracks homebuilder confidence in current and future single-family home sales and traffic of potential homebuyers on a monthly basis. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook.

Regional sentiment once again followed in the national indices’ footsteps, with index readings all below than those recorded in December, except in the Midwest region.

But despite January’s lower figures, all components and regions tracked by the indices were higher compared to readings in January 2020.

The housing market’s strength from last year has carried into the new year so far. Homebuyers continue to apply for bigger loans to purchase new homes, while the supply of available homes reached an all-time low.





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