Builders Voice Confidence at the Start of a New Year
At the start of a new year, the nation’s home builders expect the housing market to remain strong as a growing economy helps offset the impact of slowly rising mortgage interest rates, according to the NAHB/Wells Fargo Housing Market Index (HMI), which was released on Jan. 18.
The January HMI was 70, down one point from December but the same as the average monthly level for the final quarter of 2004, which was the strongest period for the index last year. January’s index is based on responses from builders who were surveyed during the past two weeks.
“Builders are geared up for another solid year and expect the demand from home buyers to remain resilient,” said newly elected 2005 NAHB President David Wilson, a custom home builder from Ketchum, Idaho. “We expect somewhat higher mortgage rates, but they will still be at reasonably affordable levels to accommodate families who are shopping for a new home.”
Positive trends in employment and household income will buoy housing demand this year, according to NAHB Chief Economist David Seiders, although builders will have to contend with rising interest rates and, in some markets, high housing prices that impact housing affordability. “Following a record year for home sales and single-family starts, the balance of forces is likely to take a modest toll of three percent to four percent this year,” he said.