For July, builder confidence in the market for newly built, single-family homes rose six points to 57 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the third consecutive monthly gain and the index's strongest reading since January 2006.
To calculate the HMI, the NAHB asks builders to rate sales, expected sales and buyer traffic as good, fair or poor. A number over 50 indicates that more builders view conditions as good than poor.
All three components posted gains in July. Current sales rose five points to 60, expected sales rose seven points to 67, and traffic of prospective buyers rose five points to 45. All four regions of the country posted gains in their HMI scores' three-month moving average, with all but the Northeast sitting at or above 50.
"Builders are seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten," said NAHB Chief Economist David Crowe in a statement. "Meanwhile, as the infrastructure that supplies home building returns, some previously skyrocketing building material costs have begun to soften."
NAHB's HMI tables can be found at www.nahb.org/hmi.
