After falling 5 points in October, builder confidence in the market for newly built single-family homes rose 4 points -- to a level of 58 -- on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
“Low interest rates, affordable home prices and solid job creation are contributing to a steady housing recovery,” said NAHB Chief Economist David Crowe. “After a slow start to the year, the HMI has remained above the 50-point benchmark for five consecutive months, and we expect the momentum to continue into 2015.”
At the same time, though, Sterne Agee Chief Economist Lindsey Piegza notes that while conditions have improved after a slow start to the year, “sales, starts and permits are hardly improving at a robust pace.” In fact, she says, the recovery in the housing market “remains slow.”
How they see it
The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.”
Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three HMI components increased in November. The index gauging current sales conditions rose 5 points to 62, while the index measuring expectations for future sales moved up 2 points to 66, and the index gauging traffic of prospective buyers increased 4 points to 45.
Looking at the three-month moving averages for regional HMI scores, the Northeast rose 3 points to 44, the South posted a 4-point gain to 62, and the West edged up 1 point to 58. The Midwest registered a 2-point loss to 57.