Confidence among U.S. home builders rose to a six-month high in January on signs the worst of the slump in home sales could be over.
The National Association of Home Builders/Wells Fargo index of sentiment increased to 35 this month from a revised 33 in December, the association said Wednesday. A reading below 50 means most respondents view conditions as poor.
Lower borrowing costs and an increase in applications for mortgages suggest demand for new homes might be stabilizing after sales plunged an estimated 17 percent last year, contributing to a slowdown in economic growth.
“It certainly provides a glimmer of hope,” said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Conn. “Even when home sales level off, you’re still going to have a big inventory problem.”
Confidence rose in three of four regions, including to 24 from 22 in the Midwest. It remained at 32 in the West.
