Steel Markets

Builder Confidence at a 20-Year High

Written by Sandy Williams

Builders are feeling confident about the market for newly built single-family homes. The National Association of Home Builders/Wells Fargo Housing Market Index rose five points to 76 in December after an upward revision to the November reading. This is the highest reading for the HMI since June 1999.

“Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chief Economist Robert Dietz. “While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still underbuilding due to supply-side constraints like labor and land availability. Higher development costs are hurting affordability and dampening more robust construction growth.”

All three components of the HMI (current sales, sales expectations, traffic of prospective buyers) rose in December.

On a regional basis, the three-month moving averages for the HMI were: Northeast down 2 points to 61, Midwest up 5 points to 63, South up one point to 76 and the West up three points to 84.

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