U.S. homebuilders lost confidence in the market for newly built single-family homes in December, with the National Association of Home Builders/Wells Fargo Housing Market Index dropping four points from November to 56.
All indices posted declines in December, including the indices that measure current sales conditions, homebuilder expectations over the next six months and buyer traffic. However, homebuilder sentiment remains positive, according to NAHB's monthly survey, on which the indices are based.
NAHB Chairman Randy Noel cited rising housing costs as the main cause of lower purchases, despite consumer demand. However, Noel expects that recent declines in mortgage interest rates will help move the market forward in early 2019.
Regionally, in terms of three-month moving averages, the housing market index for the Midwest fell two points to 55; the West and South both fell three points to 68 and 65, respectively; and the Northeast dropped by eight points to 50.