Builder Confidence in U.S. Falls in January

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Builder confidence for newly-built, single-family homes fell in January, after reaching a record level in December. 

The housing market index fell one point to 56 from a revised December reading of 57, according to the National Association of Home Builders. Last month, NAHB reported an unadjusted reading of 58, representing levels seen in 2005.

"Following an unexpected jump last month, builder confidence has essentially leveled out and is holding at a solid level," NAHB Chairman Rick Judson, said in the report. "Many markets continue to improve and this bodes well for future home sales."

Any reading over 50 for the index indicates expansion for the housing market. The U.S. Census Bureau reported a 27.7 percent increase in housing starts in November, to reach the highest level in five years. Earlier this month, the commerce department reported a 1 percent increase in construction spending in November, the fastest rate since March 2009. 

"Rising home prices, historically low mortgage rates and significant pent-up demand will drive a continuing, gradual recovery in the year ahead," NAHB chief economist David Crowe, said in the report. "However, the pace of the recovery could be stronger were it not for rising construction costs and inaccurate appraisals that are keeping some home sales from going through."

All three of the HMI components -- current sales conditions, expectations for future sales, and prospective buyers -- dropped in January.

Regionally, the Northeast and West each increased four points in the three-month averages to 42 and 63, respectively. The South remained at 56, while the Midwest fell one point to 58.