Home builders have a unique perspective on the housing market. After all, to be successful, they have to know what buyers are looking for, when they’re looking, and where they want to live. Because of this they can be an excellent gauge of the health of the housing market. That’s why the National Association of Home Builders takes a monthly measure of builder confidence. Its Housing Market Index surveys builders and scores their responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In December, the Index scored a 37, up three points from the month before. Alicia Huey, NAHB’s chairman, says falling mortgage rates led to the first increase in four months. “With mortgage rates down roughly 50 basis points over the past month, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look,” Huey said. Among the index components, the gauge of future sales expectations saw the biggest rebound, rising six points to 45. (source)
