The National Association of Home Builders conducts a monthly survey of builders in order to gauge their confidence in the market for new homes. Builders have a unique perspective on the market and, because of that, the NAHB’s survey is a closely watched barometer of housing health. In June, the index reached positive territory for the first time in almost a year. In fact, the index scored a 55 on a scale where any number above 50 indicates that more builders view conditions as good than poor. The reason for home builders’ growing optimism? There are several. The lack of available existing homes for sale is one. Because buyers are struggling to find previously owned homes to buy, the new home market is seeing more demand. Robert Dietz, NAHB’s chief economist, says the likelihood that the Fed will slow interest-rate increases is another. “The Federal Reserve nearing the end of its tightening cycle is also good news for future market conditions in terms of mortgage rates and the cost of financing for builder and developer loans,” Dietz said. (source)
