Housing Market Index Remains Very Strong

Sentiment remains very strong among the nation's home builders whose housing market index is at 72 in January, holding onto half of December's 4 point surge which holds unrevised at an expansion high of 74.

A key strength in January, as it especially was in December, is the traffic component which is at 54 and outside of December's 58 is a 13-year high. The sudden gain in traffic points to new interest among first-time buyers.

The report's other components both show outstanding strength, at 79 for present sales and 78 for 6-month sales. The West leads composite scores at 83 followed by the South at 72 and the Midwest at 69. And like the traffic component, another feature of this report is sudden acceleration in the Northeast which moved over 50 in November and is at a very strong 62 in today's report for January.

Housing data have been pivoting higher the last several months and confirmation of strength in tomorrow's housing starts and permits data could very well focus new attention on the momentum underway in the sector.

Recent History Of This Indicator
Confidence among the nation's home builders has been unusually strong. The traffic component was the highlight of the last housing market report, jumping to a long-term high and pointing to a buyer surge in the new home market. Current sales and future sales likewise hit long-term highs. Econoday's January consensus calls for only the slightest slowing in the housing market index to 73 from December's 74.