Market for new single-family homes gains on solid fundamentals
Builders believe that the market for newly-built single-family homes is getting better with a key measure of confidence rising in December.
The National Association of Home Builders / Wells Fargo Housing Market Index (HMI) rose 5 points to a reading of 76 this month, its highest reading since June 1999.
The index comprises three parts and all were higher this month: a seven-point gain for the index gauging current sales conditions to a reading of 84; the component measuring sales expectations in the next six months edged up one point to 79; and the measure charting traffic of prospective buyers increased four points to 58.
“While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still underbuilding due to supply-side constraints like labor and land availability,” said NAHB Chief Economist Robert Dietz. “Higher development costs are hurting affordability and dampening more robust construction growth.”
Northeast lags
For the three-month moving average of the HMI across the major regions the Northeast was down two points to 61, the Midwest increased five points to 63, the South moved one point higher to 76 and the West rose three points to 84.
“Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chairman Greg Ugalde.
