Adding to growing evidence the U.S. housing market is on the mend, the National Association of Home Builders (NAHB) announced today builder confidence in the market for newly built single-family homes climbed two points in December to 47 from a downwardly revised November reading.
The composite NAHB/Wells Fargo Housing Market Index (HMI) is now at its highest point since April 2006. The HMI is approaching 50, a reading that indicates more builders view sales conditions as good than poor.
Two of the HMI's three component indexes are now above 50. The component gauging current sales expectations rose two points to 51 in December, while the component gauging sales expectations in the next six months slipped one point, to 51. The component measuring traffic of prospective buyers increased one point, to 36.
"Builders across the country are reporting some of the best sales conditions they've seen in more than five years, with more serious buyers coming forward and a shrinking number of vacant and foreclosed properties on the market," said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. "However, one thing that is still holding back potential home sales is the difficulty that many families are encountering in getting qualified for a mortgage due to today's overly stringent lending standards."
"While there is still much room for improvement, the consistent upward trend in builder confidence over the past year is indicative of the gradual recovery that has been taking place in housing markets nationwide and that we expect to continue in 2013," said NAHB Chief Economist David Crowe.
