Housing Market Index Signals Continued Builder Confidence
The Housing Market Index has increased two points to 21 for December, indicating builder confidence for new single-family homes. This makes the third month in a row to report increased confidence, with the index at its highest since May 2010.
While acquiring credit for buying and building new homes remains difficult to receive, “This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend,” said NAHB Chief Economist David Crowe. “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months.”
The index is made of three component indexes, which all improved for December. The index for current sales conditions rose two points while the index gauging sales expectations in the next six months edged up one point. The prospective buyers’ index gained three points as well. Builder confidence was strongest in the South with a four-point-gain along with the West, increasing one point. However, the Midwest remained flat while the Northeast slipped one point.
Source: National Association of Home Builders/Wells Fargo