Builders Expect New Home Sales Bump

Builders are in an unique position to gauge home buyer traffic and demand for newly-built single-family homes. Because of this, their views are considered an important measure of the market’s health and future outlook. Each month, the National Association of Home Builders surveys builders and scores their responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In May, the index was unchanged from the month before – remaining at 58 for the fourth-consecutive month. Robert Dietz, NAHB’s chief economist, says a closer look at the numbers shows there is a lot of optimism about the market going forward. “The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen,” Dietz said. “Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward.” In fact, builders are so optimistic that the index component measuring sales expectations for the next six months jumped three points to 65, while gauges of buyer traffic and current sales stayed flat. Regionally speaking, three-month moving averages show the Midwest and South up a point, the West unchanged, and the Northeast down slightly. More here.

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