New Home Market Off To Optimistic Start

New data from the Commerce Department and the National Association of Home Builders shows builders are optimistic about the market for new homes this year. That’s an encouraging sign, as a lower than normal number of homes available for sale has caused affordability conditions to decline in recent months. If more new homes are built, buyers will have more options to choose from and home prices should begin to moderate. In December, the number of new homes that broke ground was up 11.3 percent from the month before, according to the Commerce Department. The number of permits to build single-family homes also rose, jumping 4.7 percent. Additionally, the NAHB’s Housing Market Index – which measures builder confidence on a scale where any number above 50 indicates more builders feel conditions are good than poor – scored a 67 this month. NAHB chief economist, Robert Dietz, says the group expects continued improvement this year. “NAHB expects solid 10 percent growth in single-family construction in 2017, adding to the gains of 2016,” Dietz said. “Concerns going into the year include rising mortgage interest rates as well as a lack of lots and access to labor.” Regional results show three-month moving averages up slightly in the Northeast and Midwest, while the West and South held steady at 79 and 67, respectively. More  here.

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