Builder confidence is increasing as the economy recovers from the COVID-19 pandemic. The National Association of Home Builders/Wells Fargo Housing Market Index jumped 21 points in June to a score of 58, returning to positive market conditions. Any score above 50 indicates that builders view conditions as good as opposed to bad.
“As the nation reopens, housing is well-positioned to lead the economy forward. Inventory is tight, mortgage applications are increasing, interest rates are low and confidence is rising. And buyer traffic more than doubled in one month even as builders report growing online and phone inquiries stemming from the outbreak,’ commented NAHB Chief Economist Robert Dietz.
The components comprising the HMI Market Index all surged during in June. Current sales conditions jumped 21 points to 63, sales expectations for the next six months leapt 22 points to 68, and traffic of prospective buyers gained 22 points to post an index reading of 43.
Regionally, only the Northeast remained below the 50 neutral point, gaining 31 points to register 48. The South gained 20 points to 62, the Midwest 19 points to 51, and the West soared 22 points to 66.
Said Dietz, “Housing clearly shows signs of momentum as challenges and opportunities exist in the single-family market. Builders report increasing demand for families seeking single-family homes in inner and outer suburbs that feature lower density neighborhoods. At the same time, elevated unemployment and the risk of new, local virus outbreaks remain a risk to the housing market.”
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