Housing Market Index rises

A bit of a surprise in the National Association of Home Builders' index this month. The January reading came in at 35, versus forecasts for a reading of 33 (which would have matched the December reading). The sub-index for buyer traffic was up 3 points, reversing the previous month's 3-point decline. The sub-index for present sales rose 3 points after being flat the previous month. The sub-index for future sales expectations was unchanged after gaining 4 points in December.

It's worth noting, however, that the index is well off its year-ago level of 57 and not far above its nadir -- 30 in September. It's also worth noting that interest rates have risen off their low, about 35 basis points on the 10-year Treasury Note. With the Fed likely sidelined by the latest economic and inflation news (meaning, no short-term rate cuts are imminent), I would expect mortgage and home purchase demand to ease back again soon.