When builders feel confident, they build more homes. And, as more homes are built, the housing market becomes more balanced. In other words, how builders feel about the market for new homes is an important factor in whether prices rise or fall and what buyers and sellers can expect from their local real estate market. Because of this, the National Association of Home Builders conducts a monthly survey of builders and ranks their responses on a scale where any number above 50 indicates more builders view conditions as good than poor. Because builders’ views are considered an important barometer, the index is closely watched by industry experts. In April, the NAHB’s index scored a 68, proving builders remain optimistic. Granger MacDonald, NAHB’s chairman, says that though there was a slight dip from March, builders are still confident. “Even with this month’s modest drop, builder confidence is on very firm ground, and builders are reporting strong interest among potential home buyers,” MacDonald said. How many new homes are built this year will have a significant affect on affordability conditions and how favorable conditions are for prospective home buyers.
