Builder confidence in the market for newly built single-family homes crept up three points this month, according to the National Association of Home Builders' (NAHB) Housing Market Index (HMI), released today. The increase builds upon a revised three-point increase in October, bringing the index to its highest level since May 2010.
Builder confidence in the market for newly built single-family homes crept up three points this month, according to the National Association of Home Builders' (NAHB) Housing Market Index (HMI), released today. The increase builds upon a revised three-point increase in October, bringing the index to its highest level since May 2010.
"While this second solid monthly gain on the builder confidence scale is encouraging, the overall measure remains quite low due to the many challenges that home building continues to face with regard to the high number of foreclosures, the difficulties of obtaining construction financing and accurate appraisals, and the restrictive lending environment that is discouraging potential buyers," said Bob Nielsen, NAHB chairman and a home builder from Reno, Nev. "These problems must be addressed so that housing can contribute to economic and job growth the way it has in the past."
Any index reading below 50 indicates more homebuilders view conditions as bad than good.
"This second consecutive gain in the HMI is evidence that well-qualified buyers in select areas are being tempted back into the market by today's extremely favorable mortgage rates and prices," said NAHB Chief Economist David Crowe. "We are anticipating further, gradual gains in the builder confidence gauge heading into 2012 due to these pockets of improving conditions that are slowly spreading."
The component gauging current sales conditions rose three points to 20, the component gauging sales expectations in the next six months rose two points to 25, and the component gauging traffic of prospective buyers rose one points to 15.
