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Builders Remain Bullish About Home Sales

Home builders’ expectations for single-family home sales over the next six months are running at their highest level in more than two years, according to NAHB’s latest Housing Market Index (HMI), which is a key monthly barometer of builder confidence.

Released last week, the July index climbed two points to a score of 64. The component gauging sales expectations rose three points to a reading of 73.

The other two components of the index — current single-family home sales and the traffic of prospective home buyers — rose to 69 and 50, respectively.

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

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“Builders remain confident as favorably low interest rates on home mortgages and solid price performance continue to stimulate home buying,” said NAHB President Kent Conine.

While the latest survey largely reflects builder sentiment in June, when mortgage interest rates were their lowest in nearly 50 years, current mortgage interest rates “remain very attractive to home buyers” even though they have climbed slightly in recent weeks, said NAHB Chief Economist David Seiders.

“A bigger concern among builders in several regions of the country is their ability to meet demand because land availability has been reduced due to regulatory constraints and the high cost of land in their areas,” Seiders added.

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