Builders’ confidence in the market for new single-family homes increased as the National Association of Home Builders' housing market index rose to 68 in August from 64 in July.
IFR's poll of economists predicted the index would be 65.
“Our members are encouraged by rising demand in the new-home market,” NAHB Chairman Granger MacDonald said. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.”
“The fact that builder confidence has returned to the healthy levels we saw this spring is consistent with our forecast for a gradual strengthening in the housing market,” according to NAHB Chief Economist Robert Dietz. “GDP growth improved in the second quarter, which helped sustain housing demand. However, builders continue to face supply-side challenges, such as lot and labor shortages and rising building material costs.”
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
The current single-family home sales index grew to 74 from 70 the sales expectations index for the next six months increased to 78 from 73; and the traffic of prospective buyers index climbed to 49 from 48.