How Builder Confidence Affects Home Prices

You may not have given any thought to whether or not home builders are feeling optimistic about the market but it has something to do with you. Whether you’re a prospective home buyer or an owner looking to sell their house, the new home market plays a role. That’s because, when builders are feeling confident that there are serious buyers out there, they build more homes and that leads to home prices leveling off. In other words, when there are more homes for sale, price increases slow. So how are home builders feeling currently? Well, according to the National Association of Home Builders’ Housing Market Index – which scores builder confidence on a scale where any number above 50 indicates more builders feel good than poor – they are feeling better than they have in almost a year. In fact, September’s index reached 65, the highest since last October. Ed Brady, NAHB’s chairman says the results are a positive sign for the entire housing market. “As household incomes rise, builders in many markets across the nation are reporting they are seeing more serious buyers, a positive sign that the housing market continues to move

forward,” Brady said. “The single-family market continues to make gradual gains and we expect this upward momentum will build throughout the remainder of the year and into 2017.” More here.


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