The National Association of Home Builders' Wells Fargo Housing Market Index (HMI), released Monday morning, reported a score of 60 for August, two-points up from July's downwardly-revised reading of 58. A score over 50 indicates a positive outlook for the home building industry.
“New construction and new home sales are on the rise in most areas of the country, and this is helping to boost builder sentiment,” NAHB Chairman Ed Brady commented on the builder confidence hike in a statement.
From July to August, present conditions of single-family sales saw a 2-point jump, indicating a brisk Summer housing market. Forecasts for single-family sales in the next six months went up by one point to a score of 67, the fourth straight month hovering over a mark of 65. On the contrary, traffic of prospective buyers slowed for the second consecutive time from 45 to 44.
Builders in three out of four regions have a positive outlook (50 points and higher) for the housing market. Those building in the West remain most confident among all, with a confidence score of 68, despite a two-point decline from July. Closely behind are the South and Midwest, for which the market index stands at 64 and 53, respectively. The Northeast region picked up three points to a score of 44 in August, but still remains in negative perception territory.
“Builder confidence remains solid in the aftermath of weak GDP reports that were offset by positive job growth in July,” said NAHB Chief Economist Robert Dietz. “Historically low mortgage rates, increased household formations and a firming labor market will help keep housing on an upward path during the rest of the year.”
Read the NAHB statement here.