Homebuilders Remained Confident in January on Rising U.S. Sales

By Qiong (June) ZhangNo Comments

http://www.bloomberg.com/news/2014-01-16/homebuilders-remained-confident-in-january-on-rising-u-s-sales.html?cmpid=yhoo

Confidence among U.S. home builders held in January near its highest level in eight years, indicating the residential real-estate market will continue to contribute to economic growth in 2014.

The National Association of Home Builders/Wells Fargo builder sentiment gauge fell to 56 from 57 in December.

Builder confidence fell in two of four regions, led by a seven-point drop in the South. The index also fell in the Midwest and rose in the Northeast and West.

Borrowing Costs

Borrowing costs for homebuyers, which have been climbing since May, were largely unchanged for the week ended Jan. 9, with the average 30-year, fixed-rate mortgage at 4.51%, down from 4.53% the week before. A year ago, the average rate was 3.4%, according to Freddie Mac.

A strengthening housing market and low interest rates have boosted builders, suppliers and lenders. The outlook remains positive even with a plunge in mortgage refinancing and slowing growth in home values. And despite the rise in , and interest rates over the past year, housing is still very affordable.

A report  to show housing starts dropped to a 990,000 annualized pace in December after surging to a more than five-year high of 1.09 million the prior month, according to the median forecast of economists surveyed before figures from the Commerce Department. It would still mark the best back-to-back months since 2008.

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