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06-19-20 | News

Home Builders Regain Confidence

HMI Expands by 21 Points
by Staff

In the most recent Housing Market Index, all four regions posted gains led by the Northeast's 31 points. The West was up 22 points, the South increased 20 points and the Midwest added 19 points.

The National Association of Homebuilders states that, "In a sign that housing stands poised to lead a post-pandemic economic recovery, builder confidence in the market for newly-built single-family homes jumped 21 points to 58 in June (any reading above 50 indicates a positive market). This is based on their, in conjunction with Wells Fargo, Housing Market Index.

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"As the nation reopens, housing is well-positioned to lead the economy forward," says NAHB chairman Dean Mon, a homebuilder and developer from Shrewsbury, New Jersey. "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."
"Housing clearly shows signs of momentum as challenges and opportunities exist in the single-family market," said Robert Dietz, NAHB chief economist. "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."
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months, as well as the rate of traffic of prospective buyers. Scores for each component are then used to calculate a seasonally adjusted index.
All three components posted gains in June. Current sales conditions bumped up 21 points to 63, sales expectations in the next six months swelled 22 points to 68 and traffic of prospective buyers also added 22 points to 43.

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