For the first time in five months, we’re finally seeing a gain in home builder sentiments. According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for October, builder confidence for newly built, single-family homes rose three points to 16.
Bob Jones, NAHB Chairman and home builder in Bloomfield Hills, Mich., explains, “Builders are starting to see some flickers of interest among potential buyers, and are hopeful that this interest will translate to more sales in the coming months.”
For over 20 years, the NAHB/Wells Fargo HMI survey has asked home builders to measure perceptions of current single-family home sales and sales expectations for the next six months, as well as rate traffic of prospective buyers. Scores are then used to calculate a seasonally adjusted index where a 50 represents an average builder confidence. Scores under 50 show levels are less than average, and vice versa. Though still below 50, builder confidence not only improved across every region this month, HMI also rose across all three components mentioned above.
“The new-homes market is finally moving past the lull that occurred when the home buyer tax credits expired and economic growth stalled this summer,” said NAHB Chief Economist David Crowe.
For survey results and tables for the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), click here.