By Sharon Nunn 
 

WASHINGTON--A gauge of U.S. home-builder confidence increased in January after two straight-months of stark declines.

The National Association of Home Builders on Wednesday said its index of builder confidence in the market for new single-family homes rose to 58 in January from 56 in December. Economists surveyed by The Wall Street Journal had expected a January reading of 56.

"The gradual decline in mortgage rates in recent weeks helped to sustain builder sentiment," said NAHB Chairman Randy Noel. "Low unemployment, solid job growth and favorable demographics should support housing demand in the coming months."

The average interest rate on a 30-year fixed-rate mortgage was 4.64% in December, down from nearly 5% in October, according to Freddie Mac.

Lower rates "will help the housing market continue to grow at a modest clip as we enter the new year," said NAHB Chief Economist Robert Dietz.

Because of the partial government shutdown, the Commerce Department may not release home construction data on Thursday.

Write to Sharon Nunn at Sharon.Nunn@WSJ.com

(END) Dow Jones Newswires

January 16, 2019 10:14 ET (15:14 GMT)

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