Builders Confidence Buoyed by Stabilizing Shift in Market
Rising affordability, low mortgage rates and other suggesting stabilizing conditions in the nation’s single-family housing market boosted home builder confidence in November as it edged up for the second consecutive month, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI gained two points from the previous month to stand at 33.
“More and more builders are seeing light at the end of the tunnel,” said NAHB President David Pressly. “Our members are telling us that the market is steadying after a significant downward correction. On the demand side, we look for sales to stabilize and gradually move up in the coming months.”
“With home prices leveling off, mortgage interest rates remaining near historic lows, energy prices declining and the economy continuing to generate solid growth in employment and household income, affordability is now on the mend and many consumers recognize that home buying conditions have improved,” said NAHB Chief Economist David Seiders. “Builders are picking up on this change in market momentum.”
Derived from a monthly survey that NAHB has conducted for almost 20 years, the index gauges builders’ perceptions of current single-family home sales, sales expectations for the next six months and traffic from prospective buyers. The scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
All three component indexes moved higher in November. Current single-family homes sales registered a 33 on this month’s index, one point higher than the September reading; expected sales rose four points for the second consecutive month to 46; and traffic was up three points to 26.
“Looking ahead, builder outlook is perking up,” said Pressly. “With builders continuing to offer significant sales incentives and affordability on the rise, home shoppers have greater opportunities today than they have had for several years, making this an opportune time to buy.”
Regionally, the HMI rose two points to 37 in the Northeast and two points to 40 in the South. Builder confidence edged down two points to 16 in the Midwest and one point to 34 in the West.
Want to Know the Housing Starts Through 2015?
Find out in HousingEconomics.com’s Long-Term Forecast.
HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.
To learn more, visit www.housingeconomics.com.
NAHB Kit Gives Builders Back-to-Basics Tips in Changing Market
With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.