Builder confidence in the market is up in August, marking the fourth consecutive monthly gain.
According to the National Association of Home Builders/Wells Fargo housing market index, builder confidence in the market for newly built, single-family homes jumped three points this month to 59, the highest level in nearly eight years.
“Builders are seeing more motivated buyers walk through their doors than they have in quite some time,” said NAHB Chairman Rick Judson. “What’s more, firming home prices and thinning inventories of homes for sale are contributing to an increased sense of urgency among those who are in the market.”
“Builder confidence continues to strengthen along with rising demand for a limited supply of new and existing homes in most local markets,” said David Crowe, NAHB chief economist. “However, this positive momentum is being slowed by the ongoing headwinds of tight credit and low supplies of finished lots and labor.”
The Housing Market Index is compiled from the results of a monthly survey that NAHB has been conducting for 25 years. Scores from each component of the survey are used to calculate the index. Any score over 50 indicates that a majority of builders see market conditions as favorable.
Two of the index’s three components saw gains in August, according to the NAHB. The component measuring current sales conditions jumped from 59 to 62, and the component gauging sales expectations over the next six months rose one point to 68.
All but one region of the country saw its HMI score rise in August. While the West, Midwest and South all posted gains, the Northeast stayed steady at 39.