Nation's Building News Online

Builders Confident of Healthy Six-Month Outlook for Home Sales

The confidence of home builders in the single-family housing market slipped slightly earlier this month while mortgage interest rates were still slowly climbing, but expectations for housing activity over the next six months remain at healthy levels, according to NAHB’s Housing Market Index (HMI), which was released on Sept. 16.

In terms of housing demand, “builders have had one of the hottest summers ever,” said NAHB President Kent Conine, with mortgage rates bottoming out around mid-year at their lowest levels in more than four decades.

Now that mortgage rates have moved up, builders are adjusting their expectations accordingly, said Conine.

“Even so, there is a strong current of optimism throughout our industry that today’s very healthy activity is sustainable through at least the end of this year,” he said.

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Even with somewhat higher interest rates, NAHB Chief Economist David Seiders is predicting that the accelerating pace of economic growth will help spur home sales in the period ahead.

The Housing Market Index declined to 68 from last month’s reading of 71. This month’s reading was still the second highest since February of 2000, when the index was at 69.

The component of the HMI measuring builder expectations for the next six months was unchanged from the previous month at a very healthy reading of 78.

The component of the index gauging current sales conditions fell four points to 73 and the index measuring builders’ assessments of the traffic of prospective buyers fell five points to a reading of 50.

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

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