As you might imagine given the steady rise in rates since October, homebuilder sentiment in the US remained subdued in January.

At 47, the NAHB index ticked up from December, but stayed stuck below the demarcation line separating net optimism from pessimism.

Note that the headline mood gauge hasn’t seen 50 since April. The local low was 39 in August.

Carl Harris, a custom home builder from Wichita currently serving as NAHB chair, cited rates and (naturally) burdensome regulations.

“Land is expensive and financing for private builders remains costly [but] there is hope that policymakers are taking the impact of regulatory hurdles seriously and will make improvements in 2025,” Harris said Thursday.

He also flagged the drag on demand from mortgage rates, which climbed to 7.09% over the last week, according to the MBA’s gauge.

In a testament to the psychological (and financial) drag from higher rates, the NAHB’s measure of forward-looking sales dropped six points in January from December.

Recall that last month’s reading on that metric was the highest since 2022. The drop counted as the first decline since June.

For what it’s worth, the NAHB expects housing starts to rise “slightly” this year amid the push-pull from and onerous rates and regulatory relief.

Builders, Thursday’s release said, are “concern[ed] over how building material tariffs and costs and a larger government deficit would put upward pressure on inflation and mortgage rates.”