Builders see gradual improvement | Bedford Corners Real Estate

A gauge of home builder sentiment remained steady at 60 in January, the National Association of Home Builders said Tuesday.

That was unchanged from a downwardly-revised reading in December. Economists polled by MarketWatch had expected a reading of 62.

Readings over 50 signal improvement, and readings in the low 60s show “a gradual improvement, which should bode well for future home sales in the year ahead,” NAHB Chairman Tom Woods said in a statement.

The index is down from a 10-year high of 65 in October, but still higher than the overall 2015 average of 59.

The sub-gauge that tracks current sales conditions rose 2 points to 67 in January, but the future sales component dipped 3 points to 63. The traffic gauge slid 2 points to 44. It hasn’t been above the neutral 50 mark since 2005.

Builders have gained confidence as the improving economy tugged the jobless rate to a 7-year low and started to nudge wages higher. Sales of new homes were stronger in 2015 than 2014. But builder still face headwinds, including pricier lots and scarcer labor.

That’s made many investors wary of builder stocks. KB Home shares slid earlier this month when fiscal fourth quarter earnings missed forecasts, even though orders and revenue both grew by double digits.


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