Homebuilder confidence in the market for single family homes held steady at near seven year highs in January, suggesting the outlook for the housing market remained upbeat.
The NAHB/Wells Fargo Housing Market index was at 47 this month, the highest level since April 2006. Economists polled by Reuters had expected the index to edge up to 48.
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The National Association of Home Builders said prolonged negotiations over fiscal policy had caused some uncertainty among builders this month.
A reading below 50 means more builders view market conditions as poor than favorable. The index has not been above 50 since April 2006.
"Conditions in the housing market look much better now than at the beginning of 2012 and an increasing number of housing markets are showing signs of recovery, which should bode well for future home sales later this year," said NAHB chairman Barry Rutenberg.
"Uncertainties stemming from last month's fiscal cliff negotiations contributed to the pause in builder confidence and continuing discussions among policymakers related to spending cuts and the future of the mortgage interest deduction could put a damper on housing demand in the coming months."
A measure of sales expectations in the next six months slipped a point to 49, while a gauge of current sales conditions was unchanged at 51. The prospective buyers index rose a point to 37.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)