Builders Perceive the Real Estate Market as “Good”
For 7 straight months, the NAHB/Wells Fargo Housing Market Index which gauges builder perceptions of current single-family home sales and sales expectations for the next six months has scored above 50 for builders surveyed in all four regions of the United States – the Northeast, the West, the South, and the Midwest. Beginning in May, 2013, builder perception in the U.S. took a positive turn upward and started to view the real estate recovery as a reality instead of as a dim future hope. This month, the builders surveyed averaged an overall score of 58 for three index components – current sales conditions, sales expectations and traffic of prospective buyers – with positive improvements in all three categories.
Builders are cautiously optimistic as they are starting to see the supply of spec homes which may have stood on gorgeous lots for months finally making it to closing. With the supply of new homes available down to just 4.9 months, pretty soon builders will have something else to worry about – how quickly they can start building new homes to supply a market-full of buyers who have now moved off of the fence and are interested in buying a new home.
“The recent spike in mortgage interest rates has not deterred consumers as rates are still near historically low levels,” said NAHB Chief Economist David Crowe. “Following a two-month pause in the index, this uptick is due in part to release of the pent-up demand caused by the uncertainty generated by the October government shutdown. We continue to look for a gradual improvement in the housing recovery in the year ahead.”
Even though the survey is an internal audit done by the NAHB (National Association of Home Builders) with the assistance of Wells Fargo, the survey has been given for going on 25 years, and the results seem to be accurate in reflecting the attitudes of the survey group of builders nationwide. With builder confidence on the rise, new homes sales on the rise, building permits on the rise, and home prices stabilizing, it is time for people who are truly interested in buying a home to take advantage of the inventory that is left standing in some markets as well as the historically low interest rates – both of which will not be around for too much longer.
