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Builder Confidence Holding Strong and Steady in November

The November HMI registered no discernible change in builder attitudes following an impressive four-point jump that lifted the index to its highest level of the year — 71 — in October.

“While rates on long-term mortgages have edged up marginally in the last few weeks, the average 30-year loan remains below 6%,” said NAHB President Bobby Rayburn. “That’s a key factor driving buyer demand right now.”

“The basic story hasn’t changed,” agreed NAHB Chief Economist David Seiders. “As of the end of October, the average interest rate on a 30-year mortgage was 5.64%. That moved up slightly to 5.76% as of mid-November — still an exceptionally attractive rate. The result is builders’ continued confidence in the momentum of this housing market.”

The HMI is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years.

Each month, builders rate current sales of single-family homes, prospects for sales in the next six months and the traffic of prospective buyers. Any number over 50 indicates that more builders view sales conditions as good than poor.

The component index on single-family sales rose two points this month, to 79. The indexes gauging coming sales and traffic each edged down by two points, to 80 and 50, respectively.

“Builders are sending a message of optimism heading into the final month of 2004,” said Seiders.

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