US homebuilder sentiment falls unexpectedly

Homebuilder sentiment in the US unexpectedly fell in January.

The National Association of Homebuilders’ Housing Market Index was 60, missing the forecast for 61.

The index had been expected at 61, unchanged from the reading in the prior month which was actually revised lower to 60.

“The combination of the weather worsening early in January, the deterioration in the stock market and the beginning of the Fed’s hiking cycle likely leaves builders feeling a bit more concerned,” Bank of America Merrill Lynch economists wrote in a client preview.

The traffic component, which gauges interest from first-time buyers, fell two points to 44, even as the component for future sales fell 3 points to 63.

“The index is down from 65 in October, but it is still up solidly from 56, on average, in the first half of last year and 52 in all of 2014,” Jim O’Sullivan at High Frequency Economics recapped in a note to clients.

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