NAHB attributes the surge to positive expectations for market conditions in 2018
Confidence among builders in the market for newly built single-family homes reached its highest level since July 1999, more than 18 years ago, according to the Housing Market Index (HMI) released by the National Association of Home Builders (NAHB) and Wells Fargo.
Builder confidence was 74 in December, an increase of five points from the previous index level.
“Housing market conditions are improving partially because of new policies aimed at providing regulatory relief to the business community,” NAHB Chairman Granger MacDonald said.
“The HMI measure of home buyer traffic rose eight points, showing that demand for housing is on the rise,” NAHB Chief Economist Robert Dietz said. “With low unemployment rates, favorable demographics, and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year.”
During the month, the three index components all registered gains. There was an eight-point increase in the component measuring buyer traffic to 58, while the component charting current sales conditions gained four points to 81. The index gauging sales expectation in the next six months was at 79, up three points from the previous level.
All regions saw gains in the three-month moving average for HMI scores. The biggest gain was six points in the Midwest to 69, followed by the three-point increase in the South to 72. The average rose two points to 79 in the West, while the Northeast region saw its average increase by a point to 54.
The seasonally adjusted index is calculated based on a monthly survey that looks at builder perceptions of single-family homes sales, sales expectations for the next six months, and the traffic of prospective buyers. An index level above 50 shows more builders think conditions are good than poor.
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Builder confidence was 74 in December, an increase of five points from the previous index level.
“Housing market conditions are improving partially because of new policies aimed at providing regulatory relief to the business community,” NAHB Chairman Granger MacDonald said.
“The HMI measure of home buyer traffic rose eight points, showing that demand for housing is on the rise,” NAHB Chief Economist Robert Dietz said. “With low unemployment rates, favorable demographics, and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year.”
During the month, the three index components all registered gains. There was an eight-point increase in the component measuring buyer traffic to 58, while the component charting current sales conditions gained four points to 81. The index gauging sales expectation in the next six months was at 79, up three points from the previous level.
All regions saw gains in the three-month moving average for HMI scores. The biggest gain was six points in the Midwest to 69, followed by the three-point increase in the South to 72. The average rose two points to 79 in the West, while the Northeast region saw its average increase by a point to 54.
The seasonally adjusted index is calculated based on a monthly survey that looks at builder perceptions of single-family homes sales, sales expectations for the next six months, and the traffic of prospective buyers. An index level above 50 shows more builders think conditions are good than poor.
Related stories:
Increasing builder confidence points to steady growth for housing market
Builder confidence rebounds in October
