Source: National Association of Home Builders, Washington, D.C.
Builder confidence in the market for new single-family homes rose three points to 59 on the NAHB/Wells Fargo Housing Market Index (HMI) for August, marking a fourth consecutive monthly gain and bringing the index to its highest level in nearly eight years.
HMI gauges perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor,” and asks builders to rate prospective-buyer traffic as “high to very high,” “average” or “low to very low.” Scores from each component are used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
“Builders are seeing more motivated buyers walk through their doors than they have in quite some time,” says NAHB Chairman Rick Judson, a Charlotte, N.C., home builder. “Firming home prices and thinning inventories of homes for sale are contributing to an increased sense of urgency among those in the market.”
“Builder confidence continues to strengthen along with rising demand for a limited supply of new and existing homes in most local markets,” adds NAHB Chief Economist David Crowe. “However, this positive momentum is being slowed by the ongoing headwinds of tight credit and low supplies of finished lots and labor.”