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Homebuilder Sentiment Hovers Near Record Low

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AP

U.S. homebuilder sentiment hovered just above a record low in January as a glut in houses for sale and tight lending conditions continued to depress the market, the National Association of Home Builders said Wednesday.

The NAHB/Wells Fargo Housing Market index rose 1 point to 19 in January, the group said in a statement. The December level was revised lower by 1 point to 18, the lowest since the survey began in January 1985, it said.

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Economists polled by Reuters had predicted the index would be unchanged at 19. Readings below 50 mean more builders view market conditions as poor than favorable.

The index "has held within a narrow two-point range for the past five months, indicating that builder views of housing market conditions essentially haven't changed over that time," David Seiders, the NAHB chief economist, said in a statement.

The measure of current single-family sales was unchanged at 19, but Seiders said builders expect conditions to improve in the second half of this year.

The NAHB's index for single-family sales for the next six months climbed 2 points in January to 28, the highest in five months. The gauge measuring the traffic of prospective buyers edged up to 14 in January from 13 in December.

Shares of homebuilders hit five-year lows last week as investors worried that rising defaults on mortgages and losses for lenders would sap a recovery. The Dow Jones Home Construction Index rose 2.05 percent on Wednesday.