Builder confidence increases in October
October, 2012
According to the recently released National Association of Home Builders/Wells Fargo Housing Market Index, builder confidence increased in the market for newly built, single-family homes category in October, marking the sixth straight month of gains.
The latest gain of one point brought the index to a score of 41, which is the strongest level its been since June of 2006.
"The slight gain in builder confidence this month is an indication that, while still moving forward, the speed at which the housing recovery is proceeding is being moderated by the various constraints such as tight credit, difficult appraisals and more recently, the limited inventory of buildable lots in certain markets,” said NAHB Chief Economist David Crowe. “These are the complicating factors that make it difficult for builder confidence to reach and surpass the 50-point mark, at which an equal number of builders view sales conditions as good versus poor.”
The survey was taken from the monthly survey that NAHB has conducted for the past 25 years, gauging builder perceptions of single-family home sales and sales expectations for the next six months. Home builders can rate the traffic of prospective buyers as "high to very high," "average" or "low to very low."
Scores from every component are then used to calculate a seasonally adjusted index where any number over 50 indicated that more homebuilders view the condition of the sales market a good than poor.
"The slight gain in builder confidence this month is an indication that, while still moving forward, the speed at which the housing recovery is proceeding is being moderated by the various constraints such as tight credit, difficult appraisals and more recently, the limited inventory of buildable lots in certain markets,” added NAHB Chief Economist David Crowe. “These are the complicating factors that make it difficult for builder confidence to reach and surpass the 50-point mark, at which an equal number of builders view sales conditions as good versus poor.”
Builder confidence continued to show increases in three out of four regions in October, including the Midwest, South and Western areas of the country.
First-time home buyers who are interested in getting a newly-built home might be in luck considering the current state of the housing market nationally. Lower prices have led to more Americans being able to afford homes across the country, turning the housing industry into a buyer's market.
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