Annualized Single-Family Housing Starts dropped 1 percent in January to 413,000 units nationwide, it’s lowest reading almost 2 years. The headlines would have you believe otherwise.

Homebuilder confidence in the market for newly-built, single family homes appears stable as the spring buying season gets underway.

Homebuilder confidence held firm for the second straight month this month, according to the National Association of Home Builders.

Despite an unfavorable HMI reading, home builders might still be less willing to “make a deal”; holding out for a better 2011.

According to the National Association of Home Builders/Wells Fargo Housing Market Index, a combination of shrinking new home inventory plus higher-quality foot traffic is boosting builder optimism.

According to the NAHB, October’s HMI reading of 16 is its highest value in 5 months. The uptick hints that the market for newly-built homes may rebound more quickly that this summer’s weak new homes sales figures would otherwise suggest.

Home builder confidence held firm this month, according to the National Association of Home Builders’ monthly Housing Market Index. September’s reading of 13 equaled a 17-month low.

After reaching a 3-year high just 90 days ago, the National Association of Homebuilders’ Housing Market Index is now at a multi-year low after falling by almost half.

Remember, it wasn’t too long ago that most builders were flush with home inventory, unable to find willing buyers. To help move product at that time, builders dropped prices and offered incentives including free upgrades. If confidence continues to sag going forward, home purchase deals of that nature may return — especially as the foreclosure market gets larger.