Homebuilders’ confidence continues on upward trend

Homebuilders’ confidence is on the rise.

This month, builder confidence for newly-built, single-family homes hit 70 on the National Association of Home Builders/Wells Fargo Housing Market Index, making it the second-highest in recovery from the financial crisis, just 1 point behind March 2017,  according to a recent release from NAHB. The survey, which has been conducted for the past 30 years, asks builders to rate sales and sales expectations of newly-built, single-family homes for the next six months as good, fair or poor, as well as the traffic of buyers as high to very high, average or low to very low. The score is then calculated using the ratings. This month, the score rose 2 points from April.

Specifically, sales expectations rose, as well as current sales conditions. However, buyer traffic dropped a point.

“This report shows that builders’ optimism in the housing market is solidifying, even as they deal with higher building material costs and shortages of lots and labor,” said NAHB Chairman Granger MacDonald.

“The HMI measure of future sales conditions reached its highest level since June 2005, a sign of growing consumer confidence in the new home market,” added NAHB Chief Economist Robert Dietz. “Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward.”

Across the country, three out of four regions saw increases in builder confidence. The Northeast rose to 49, while the South increased to 71, and the West hit 78. The Midwest stayed the same at 68.