More good news for the real estate industry – builder confidence for newly built, single-family homes increased this month, as shown on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI was released on the 18th and showed a four-point increase in builder confidence, raising the total to 18. According to a press release by the National Association of Home Builders, “this is the largest one-month gain the index has seen since the home buyer tax credit program helped spur the market in April of 2010.”
Every month for the past 20 years, the NAHB/Wells Fargo Housing Market Index has conducted a survey that evaluates builders’ perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to estimate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each of these three components are then used to calculate a seasonally adjusted index.
Although this is considered quite a significant boost, the NAHB still maintain that challenges lay ahead.
“This latest boost in builder confidence is a good sign that some pockets of recovery are starting to emerge across the country as extremely favorable interest rates and prices catch consumers’ attention,” said NAHB Chief Economist David Crowe. “However, it’s worth noting that while some builders have shifted their assessment of market conditions from ‘poor’ to ‘fair,’ relatively few have shifted their assessments from ‘fair’ to ‘good.’ One reason is that builders are facing downward pricing pressures from foreclosed homes at the same time that building materials costs are rising, and this is further squeezing already tight margins.”
For those in the industry, any step in the right direction is a small victory – a hopeful sign of more favorable times to come. To read more follow this link: http://www.nahb.org/news_details.aspx?sectionID=134&newsID=13717
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