2020.01.1614:43:00UTC+00U.S. Homebuilder Confidence Shows Slight Pullback In January

After reporting an unexpected spike in U.S. homebuilder confidence in the previous month, the National Association of Home Builders released a report on Thursday showing a slight pullback in homebuilder confidence in the month of January.

The report said the NAHB/Wells Fargo Housing Market Index edged down to 75 in January after jumping to 76 in December.

The modest decrease, which matched economist estimates, came after the index reached its highest level since June of 1999 in the previous month.

"With the Federal Reserve on pause and attractive mortgage rates, the steady rise in single-family construction that began last spring will continue into 2020," said NAHB Chief Economist Robert Dietz.

He added, "However, builders continue to grapple with a shortage of lots and labor while buyers are frustrated by a lack of inventory, particularly among starter homes."

The slight pullback by the headline index came as the gauge measuring current sales conditions fell to 81 in January after surging up to 84 in December.

Meanwhile, the component measuring sales expectations in the next six months held steady at 79 and the index charting traffic of prospective buyers increased inched up to 58 in January from 57 in December.

"Low interest rates and a healthy labor market combined with a need for additional inventory is setting the stage for further home building gains in 2020," said NAHB Chairman Greg Ugalde.

On Friday, the Commerce Department is scheduled to release its report on new residential construction in the month of December.

Housing starts are expected to tumble by 3.8 percent in December after spiking by 3.2 percent in November, while building permits are expected to slump by 1.9 percent after jumping by 1.4 percent.