Builders Optimistic About New Home Market

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For the third consecutive month, surveyed builders expressed increasing confidence in the market for newly built single-family homes, according to the National Association of Home Builders Housing Market Index. The index is derived from a monthly survey which scores builders confidence on a scale where any number above 50 indicates that more builders view conditions as good than poor. In August, the index rose two points to 55. It is now at the highest level it’s been since January. Kevin Kelly, NAHB’s chairman, said, as the employment picture brightens, builders are seeing a noticeable increase in the number of serious buyers entering the market. In fact, the component measuring traffic of prospective buyers was up three points, while the gauges of both current sales conditions and expectations for future sales rose two points each. Regionally, the Midwest saw a seven-point increase, the West rose four points, the Northeast was up two, and the South gained one point. David Crowe, NAHB’s chief economist, said builder confidence appears to be firming following an uneven spring. According to Crowe, the factors contributing to this improvement are sustained job growth, historically low mortgage rates, and affordable home prices. More here.

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