Housing Market Looking Good. Home Builder Confidence Up or down?
Builder confidence jumps in January on falling mortgage rates
Courtesy of the National Association of Home Builders.
Builder confidence in the market for newly built single-family homes surged in January as mortgage rates slid below 7%, the National Association of Home Builders reported.
Specifically, the NAHB/Wells Fargo Housing Market Index (HMI) rose seven points to 44, its second monthly increase in a row. Any number over 50 indicates that more builders view conditions as “good,” rather than “poor.”
The share of builders reducing home prices slid to 31% in January from 36% in the previous two months, representing the lowest level since August 2023, NAHB noted.
The HMI is made up of three components, all of which gained ground in December. The component gauging current sales conditions rose seven points to 48, the gauge measuring sales expectations in the next six months jumped 12 points to 57, and the component measuring traffic of prospective buyers rose five points to 29.
The three-month moving average for regional HMI scores was up in three of four regions, rising four points in the Northeast to 55, two points in the South to 41 and one point in the West to 32. It was flat at 34 in the Midwest.
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Housing Market Looking Good. Home Builder Confidence Up or down?
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Housing Market Looking Good. Home Builder Confidence Up or down?
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Homebuilder confidence rose in December despite supply-side challenges, marking the fourth monthly increase in a row, the National Association of Home Builders reported, citing the latest NAHB/Wells Fargo Housing Market Index (HMI).
December’s reading of 84 was up one point from November, driven by low existing inventories and strong boston condo for sale buyer demand, the NAHB said in a press release. The reading matches the year’s high in February.
The index’s measure of current sales conditions also showed positive builder sentiment, rising one point to 90, while the six-month sales-expectations measurement was flat at 84. The buyer-traffic component rose one point to 70.
Regionally, the three-month moving average of the index jumped four points in the Northeast to 74, three points each in the South and West to 87, respectively, while it rose two points to 74 in the Midwest.
“The most pressing issue for the housing sector remains lack of inventory,” NAHB chief economist Robert Dietz said in a press release. “Building has increased, but the industry faces constraints, namely cost/availability of materials, labor and lots. And while 2021 single-family starts are expected to end the year 24% higher than the pre-Covid 2019 level, we expect higher interest rates in 2022 will put a damper on housing affordability.”
The NAHB/Wells Fargo survey measures builder perceptions of current single-family home sales, as well as sales expectations for the next six months, as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” The results are then used to calculate a seasonally adjusted index in which any number over 50 indicates that more builders view conditions as good than poor.
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Housing Market Looking Good. Home Builder Confidence Up
Builder confidence surged in November despite supply-side challenges, marking the third monthly increase in a row, the National Association of Home Builders reported, citing the latest NAHB/Wells Fargo Housing Market Index.
November’s reading of 83 was up three points from October, driven by low existing inventories and strong buyer demand, the NAHB said in a press release.
The index’s measure of current sales conditions also showed builder optimism, rising three points to 89, while the six-month sales-expectations measurement was flat at 84. The buyer-traffic component rose three points to 68.
Regionally, the three-month moving average of the index jumped four points each in the South and the Midwest to 84 and 72, respectively, while it rose one point to 84 in the West. The reading was down two points to 70 in the Northeast
The NAHB/Wells Fargo survey measures builder perceptions of current single-family home sales, as well as sales expectations for the next six months, as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” The results are then used to calculate a seasonally adjusted index in which any number over 50 indicates that more builders view conditions as good than poor.
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Home Builder Confidence
For the third straight month, the level of builder confidence in the new home market set a record high. The National Association of Home Builders (NAHB) said the Housing Market Index (HMI) it co-sponsors with Wells Fargo soared 5 points in November to 90. This is the highest level in the 35-year history of the HMI which set records of 83 in September and 85 in October. These are the only times in its history that the Index surpassed the 80-point level and is triple its level in April when the pandemic caused it to plunge.
NAHB cautioned, however, that 69 percent of the survey responses were received before the results of the presidential election were called on Nov. 7. The election results and their future impacts on housing market conditions will be more fully reflected in December’s HMI report.
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Robert Dietz, NAHB chief economist, said that builder confidence has soared because historically low mortgage rates, favorable demographics, and an ongoing buyer preference for the suburbs have spurred demand and raised new home sales by nearly 17 percent year-over-year. He added, “Though builders continue to sign sales contracts at a solid pace, lot and material availability is holding back some building activity. Looking ahead to next year, regulatory policy risk will be a key concern given these supply-side constraints.
source: www.mortgagenewsdaily.com/11172020_nahb_builder_confidence.asp
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