Housing Market Index Posts First Increase Since October

Mortgage rates have been coming down and are likely giving a boost to the nation's home builders whose housing market index, at 58 in January, posted its first increase since October and only its second increase since May last year. The result is 1 point better than Econoday's consensus and at the top end of the consensus range.

Improvement includes a 3 point gain to 64 for 6-month sales and a 2 point gain to 63 for current sales. The traffic component also is also improving but not very much, up 1 point to a still weak 44.

At a composite score of 70 and a 5-point gain, regional data continue to be led by the West which is a focused region for home builders. The South follows at 61 with, however, both the Midwest and Northeast under breakeven 50 at scores of 49 and 48 respectively.

Housing was the weakest sector of the 2018 economy though this report hints at an early through modest 2019 rebound. The housing market index is now a key reading for the new home sector given the government shutdown and delay of definitive new home sales data.