Builders confident as pent-up demand flows through

by Ryan Smith18 Dec 2013
Builder confidence is up this month, according to data released Tuesday by the National Association of Homebuilders.

The NAHB/Wells Fargo Housing Market Index rose four points this month to 58. The index tracks current sales conditions, sales expectations and traffic of expected buyers, according to the NAHB. The four-point jump indicates an increase in builder confidence in the market for new single-family homes.

“This is definitely an encouraging sign as we move into 2014,” said National Association of Home Builders (NAHB) Chairman Rick Judson. “The HMI is up 11 points since December of 2012 and has been above 50 for the past seven months. This indicates that an increasing number of builders have a positive view on where the industry is going.”

“The recent spike in mortgage interest rates has not deterred consumers as rates are still near historically low levels,” said NAHB Chief Economist David Crowe.  “Following a two-month pause in the index, this uptick is due in part to release of the pent-up demand caused by the uncertainty generated by the October government shutdown.  We continue to look for a gradual improvement in the housing recovery in the year ahead.”

The index is derived from the results of a monthly survey that the NAHB has conducted for 25 years. The survey gauges builders’ perceptions of current sales of single-family homes and their expectations for sales over the next six months. Any number over 50 on the index indicates that builders view market conditions favorably.


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