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Builders Optimistic Heading Into New Year

The National Association of Home Builders conducts a monthly survey to measure how optimistic builders are in the market for newly built homes. Their Housing Market Index scores responses on a scale where any number above 50 indicates more builders view conditions as good than poor. The results are seen as a good indicator of housing health, as a home builder’s business is dependent on being able to read the market and anticipate buyer demand. In December, the Index fell four points to 86, after hitting a record high of 90 the month before. Robert Dietz, NAHB’s chief economist, says the housing market is a bright spot in the economy, but will face some challenges in the year ahead. “Builder confidence fell back from historic levels in December, as housing remains a bright spot for a recovering economy,” Dietz said. “The issues that have limited housing supply in recent years, including land and material availability and a persistent skilled labor shortage, will continue to place upward pressure on constructions costs.” (source)