Builder Confidence Trickles up to 10 Year High

by devteam September 16th, 2015 | Share

The National Association of Home Builders (NAHB)/Wells FargornHousing Market Index (HMI) ratcheted up another point this month continuing arnsteady rise in builder confidence in the new home market.  The composite HMI rose to 62, its highestrnreading since October 2005.</p

“The HMI shows that single-family housing is making solid progress,rnsaid NAHB Chairman Tom Woods.  “However,rnour members continue to tell us that they are concerned about the availabilityrnof lots and labor.” </p

NAHB Chief Economist David Crowe. “NAHB is projecting about 1.1 millionrntotal housing starts this year. Today’s report is consistent with our forecast,rnand barring any unexpected jolts, we expect housing to keep moving forward at arnsteady, modest rate through the end of the year.” </p

NAHB constructs its HMI from a monthly survey of its member builders whichrnit has conducted for the past 30 years. rnThe builders are asked for their perceptions of current single-familyrnhome sales as well as their expectations for those sales over the next sixrnmonths as either “good,” “fair,” or “poor.” Builders are also asked to raterncurrent prospective buyer traffic as “high to very high,”rn”average” or “low to very low.” Scores for each componentrnare then used to calculate a seasonally adjusted index where any number over 50rnindicates that more builders view conditions as good than poor.</p

The index measuring buyer traffic has lagged the other two indices for yearsrnbut increased two points this month to 47, edging closer to the benchmark of 50rnwhich it has not reached since October 2005. rnThe component gauging current sales conditions rose one point to 67, itsrnhighest level since November 2005. Meanwhile, the index charting sales expectationsrnin the next six months dropped from 70 to 68. </p

Looking at the three-month moving averages for regional HMI scores, the Westrnand Midwest each rose one point to 64 and 59, respectively. The South posted arnone-point gain to 64 and the Northeast dropped one point to 46.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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