Builder confidence had its strongest month in nearly a decade in the NAHB's HMI.
By Peter Ricci
The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) posted notable gains in July, rising six points to its highest level since March of 2007.
The six-point increase is the largest one-month gain for the HMI in nearly a decade, and the gains were universal – confidence levels in every region in the U.S. rose, with the Midwest increasing three points to 34 and the South five points to 32.
Barry Rutenberg, the chairman of the NAHB, said the widespread nature of the HMI’s gains suggest good things for construction’s future.
“Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved,” Rutenberg said. “This is greater evidence that the housing market has turned the corner as more buyers perceive the benefits of purchasing a newly built home while interest rates and prices are so favorable.”
Lisa Connell, the marketing director for J. Patrick Homes, said that in recent months she has seen the same kind of activity Rutenberg described.
“With the interest rates being at an all-time low, there is confidence in the consumers,” she said, adding that demand has been particularly strong in the Woodlands, where buyers are arriving in anticipation of Exxon Mobil’s new headquarter. She also said they have seen many buyers from Mexico, a new trend we reported on recently.
All of that, Connell said, suggests a definite improvement in Houston’s homebuilding, and she anticipates prices to noticeably rise by the end of the year.
And new data from the Census Bureau supports both Connell and Rutenberg’s perspectives. For June, building permits were up 19.3 percent year-over-year, housing starts 23.6 percent and housing completions 7.2 percent.
As Bill McBride pointed out on Calculated Risk, housing starts performed above analyst expectations and are now 59 percent higher from the bottom.
As Bill McBride pointed out on Calculated Risk, housing starts performed above analyst expectations and are now 59 percent higher from the bottom.
“This is another fairly strong housing report,” he wrote.