A contractor uses a hammer while working on townhouse under construction at the PulteGroup Metro housing development in Milpitas, California, Oct. 25, 2018.
David Paul Morris | Bloomberg | Getty Images
The nation’s single-family homebuilders are feeling very confident about their business in the new year, as high demand and low supply make for a profitable mix.
Yet, sentiment in January did slip 1 point on the National Association of Home Builders/ Wells Fargo Housing Market Index to 75, but that is considerably higher than last January, when it was 58. Last month’s reading was a 20-year high. Anything above 50 is considered positive.
Low interest rates are making homebuying more affordable, despite the price premium for new construction. Builders are also starting to pivot more to entry-level homes, after a decade of building mostly move-up product. Prices are still rising for new and existing homes, so there may be some friction ahead if affordability worsens.
“With the Federal…