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Homebuilder confidence in US further ebbs from decade high
[WASHINGTON] Confidence among US homebuilders in December slipped further away from a decade high, a sign progress in the housing industry may moderate as developers fret over rising costs for lots and labor.
The National Association of Home Builders/Wells Fargo sentiment gauge declined to 61 this month from 62 in November, the Washington-based group reported on Tuesday. Readings above 50 mean more respondents said conditions were good. The gauge reached 65 in October, a 10-year high. Momentum in the housing market has cooled after strong gains earlier in the year as limited wage growth has bridled how fast the industry can improve. With the US central bank considering raising its benchmark interest rate as soon as this week, consumers and builders may hold off on investments until the impact of higher borrowing costs becomes clearer.
"Housing had a very strong start to the year, but the momentum has softened a bit in recent months," Thomas Costerg, senior US economist at Standard Chartered Bank in New York, said before the report. "The low-hanging fruit are probably gone." The median forecast in a Bloomberg survey of 48 economists projected the index would increase to 63. Estimates ranged from 60 to 68.
Confidence eased in three of the four US regions, with builders in the Midwest showing the greatest decline to 55 from 60. Sentiment also fell in Northeast and West, and was unchanged in the South.
The prospective buyer traffic gauge dropped to 46 from 48 last month, while the current single-family home sales index decreased to 66 from 67.
The six-month sales outlook measure fell to 67 in December from 69.
The confidence index is "in line with a gradual, consistent recovery," David Crowe, NAHB chief economist, said in a statement. "With job creation, economic growth and growing household formations, we anticipate the housing market to continue to pick up traction as we head into 2016." Tom Woods, a builder in Blue Springs, Missouri, and the group's chairman, said in the statement that members, while remaining optimistic, were growing increasingly concerned about the cost of doing business.