US: Homebuilder sentiment is at its highest level since 2006

After rising for eight straight months, homebuilder sentiment stayed at 47 in January, missing expectations of a rise to 48.

The index continues to be at its highest level since April 2006.

Conditions in the housing market look much better now than at the beginning of 2012 and an increasing number of housing markets are showing signs of recovery, which should bode well for future home sales later this year,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) in a press release.

“However, uncertainties stemming from last month’s fiscal cliff negotiations contributed to the pause in builder confidence and continuing discussions among policymakers related to spending cuts and the future of the mortgage interest deduction could put a damper on housing demand in the coming months.”

The current sales component of the index stayed at 51 in January. But sales expectations for the next six months fell one point to 49.

The index has been up for eight straight months. A reading of 50 shows that an equal number of builders view the market as good or bad.

The National Association of Home Builders' housing market index is a sentiment index in which respondents rate not just the housing market but also the economy in general.

The index draws on builder perceptions of current single-family home sales and sales expectations for the next six months. It also includes builders' expectations of traffic of prospective buyers.