Builder Confidence Is High For An Expanding Market In 2018

By Kurt Real Estate Nov 23, 2019

Builder confidence in the market for newly built single family homes is high, up five points to 74 points total in December according to the Housing Market Index (HMI) of the National Association of Home Builders/Wells Fargo (NAHB). This is the highest report in 18 years.

The HMI measures home buying traffic which is also up eight points, showing further demand for housing needs. With low unemployment, interest rates, and housing supply, we can expect to see more new construction of single family residences in the coming year.

The NAHB HMI specifically gauges builders’ perceptions of current market conditions and single family home sales expectations in the next six months. They rate this on a scale from “good” to “poor” and they rate the traffic of homebuyers on a scale of very high, high, average, low, and very low. All of these components saw gains. The buyer traffic component rose eight points to 58, current sales conditions increased four points to 81, and sales expectations for the next six months went up three points to 79. With new policies aimed at providing relief to businesses, we can expect this optimism to continue.

Source: https://www.nahb.org/en/news-and-publications/press-releases/2017/12/builders-confident-as-market-primed-to-expand-in-2018.aspx