NEW YORK (TheStreet) -- The National Association on Home Builders Housing Market Index slipped by one point in January to a reading of 57.
The NAHB is confident that higher home prices and historically low mortgage rates, along with pent-up demand, will continue the gradual recovery in single-family housing starts as the year progresses.
Single-family starts remain above the 600,000 threshold as this key measure of the housing market declined to an annual rate of 667,000 in December from 727,000 in November. Both readings are below the more normal 1 million to 1.2 million unit range. Note that homebuilder sentiment continues to lead single-family starts.
Last week, we learned that the 20-city component of the Case-Shiller Home Price Index rose by 13.7% year over year in November, but slipped 0.1% from October, suggesting that the uptrend for home prices may be peaking. I view this data as a warning that the re-inflation of the housing bubble is ending after a rebound of 23.7% since the March 2012 low. Since the June/July 2006, peak home prices are down 20%.