Nation's Building News Online

Builder Confidence Surges in August

Builder confidence in the single-family housing market has surged this month, as home buyers have been rushing to lock in mortgage rates at attractive levels and the nation’s economy has showed early signs of improvement.

Released last week, NAHB’s Housing Market Index (HMI) for August jumped six points from July to a reading of 71, its highest level since January of 2000.

“Builders are still optimistic about current and expected home sales,” said NAHB President Kent Conine. “And buyers appear to be motivated to make a purchase now, while rates remain near historic lows.”

Looking ahead, added NAHB Chief Economist David Seiders, builders are optimistic that a strong level of housing activity is sustainable as the economy starts picking up steam.

Countrywide Home Loans

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

The survey asks builders to rate their current sales of single-family homes and their sales expectations as good, fair or poor. They are also asked to rate traffic of prospective buyers as high to very high, average or low to very low.

All of the HMI’s components have registered substantial gains in August.

The current sales activity component rose eight points, to 77; sales expectations rose four points to 78; and the gauge of prospective buyers climbed four points to 55.

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

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