Nation's Building News Online

Builders Confident as New Single-Family Home Sales Head for Another Record

The confidence of the nation's home builders in the market for new single-family homes rose in June back to where it was before concerns over the war in Iraq start taking a toll on the economy.

NAHB’s Housing Market Index (HMI), a key monthly measure of builder confidence, moved up to 62, five full points above a revised reading of 57 in May.

Any number over 50 indicates that more builders view sales conditions as good than poor.

NAHB Chief Economist David Seiders credited the surge in confidence to the best mortgage interest rates “in many decades” and solid appreciation in housing values. “In many markets, the biggest concern builders have is that buyer demand is outstripping the supply of lots available for development,” he said.

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Builders' ratings this month of current single-family home sales rose five points to 67; traffic of prospective buyers rose six points to 46; and sales expectations for the next six months rose a single point to a reading of 70, which is the highest level since November.

“All the fundamentals are in place for a very healthy new-home market, and builders are solidly optimistic about the remainder of this year,” Seiders said.

“Expectations have fully rebounded, and NAHB's forecasts now anticipate that 2003 sales will exceed last year's record-breaking total.”
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