WASHINGTON ( TheStreet) -- The National Association of Home Builders' index of builder sentiment came in flat month-over-month for the third consecutive month as interest among potential buyers remained sluggish. The NAHB said early Tuesday its confidence index, which measures builder perceptions of current single-family home sales and sales expectations for the next six months, came in flat at a reading of 16 in January, matching expectations according to consensus estimates listed on Briefing.com.
Any reading below 50 indicates poor sentiment. The index has not been above 50 since April 2006. The index's components include current sales conditions, sales expectations and traffic of prospective buyers. The first two components were unchanged in January at readings of 16 and 25, respectively, while traffic of prospective buyers edged up a single point to 12. "As we emerge from the traditionally slow holiday season, builders continue to look for signs of improvement in the economy, home buyer demand and builder and consumer credit conditions," said 2011 NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. "Unfortunately, a severe lack of construction financing, and widespread difficulties in obtaining accurate appraisal values, continue to limit builders' ability to prepare for anticipated improvements in buyer demand in 2011." "The HMI and its subcomponent indexes are holding steady following a below-expectations finish in 2010," noted NAHB Chief Economist David Crowe. "At this point, housing remains on the sidelines of a weak economic recovery as consumers and builders wait for clear and consistent indications that jobs and economic output are reviving. Meanwhile, the problems that builders continue to confront in obtaining production financing, and in maintaining performing lines of credit, threaten to significantly slow the onset of a housing recovery."