Builders Becoming More Optimistic About Future

Home builders are in the business of knowing what buyers want and when. Which is why the National Association of Home Builders’ monthly Housing Market Index is a closely watched indicator of market health. The index is based on a survey where builders’ responses are collected and scored on a scale where any number above 50 indicates more builders view conditions as good than poor. In December, the overall index fell for the 12th consecutive month. But while builders are clearly feeling the effects of high inflation and elevated mortgage rates, there was some good news in this month’s survey. For one, December’s decline was the smallest of the past six months. Robert Dietz, NAHB’s chief economist, says that could mean things begin to turn around soon. “The silver lining in this HMI report is that it is the smallest drop in the index in the past six months, indicating that we are possibly nearing the bottom of the cycle for builder sentiment,” Dietz said. Additionally, the survey component measuring builders’ expectations for the next six months registered a four point increase. That’s a good sign builders see brighter days ahead. (source)


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