Confidence among U.S. home builders fell slightly in January after a big jump in December. A monthly sentiment index from the National Association of Home Builders fell one point to 56. Fifty is the line between positive and negative. December's four point jump was revised down by one point.
"Rising home prices, historically low mortgage rates and significant pent-up demand will drive a continuing, gradual recovery in the year ahead," said NAHB Chief Economist David Crowe. "However, the pace of the recovery could be stronger were it not for rising construction costs and inaccurate appraisals that are keeping some home sales from going through."
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Of the survey's three components, buyer traffic fell the hardest, down three points. Current sales conditions fell one point and future sales expectations fell three points. Regionally, both the Northeast and the West saw the biggest jumps in home builder confidence, the South was flat, and the builders in the Midwest posted a one point drop in confidence.
A separate survey from the Mortgage Bankers Association showed mortgage applications to purchase a newly built home fell 11 percent in December month-to-month. This does not include any seasonal adjustments, so the drop could be attributed to slower home buying during the holiday season.
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—By CNBC's Diana Olick. Follow her on Twitter @Diana_Olick.