Builders Confident In New Home Market

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Because builders have an unique perspective on the market for newly built, single-family homes, the National Association of Home Builders surveys them each month to gauge their perception of current buyer traffic and sales, as well as their expectation for sales over the next six months. Their responses are scored on a scale where any number above 50 indicates that more builders view conditions as good than poor. In December, the NAHB’s Housing Market Index fell one point to 57. The drop follows a four-point gain in November. David Crowe, NAHB’s chief economist, said the index has stabilized in the mid-to-high 50s after a sluggish start to the year. According to Crowe, the results are consistent with with the NAHB’s assessment that the new-home market is gradually climbing back to normal. This gradual upward trend is expected to continue into 2015. December’s dip in builder confidence was due to slight declines in the index components measuring current sales and future sales expectations, both of which dropped a point from the month before. Despite the drop, however, both components are still in the 60s, with future sales expectations registering a 65. The gauge of current buyer traffic was unchanged from the previous month. More here.

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