US Homebuilders Remain Optimistic

Many industry reports indicate the U.S. housing recovery is beginning to moderate, but studies show that homebuilders are still positive about the market. The National Association of Home Builders and Wells Fargo Housing Market Index has held steady at 54 since a downward revision in October, although any number over 50 still represents optimism in the sector. Experts say homebuilders are less certain of the future, however, as they weigh consumer confidence against unresolved government debt issues and persistent unpredictability in the nation’s economy. For more on this continue reading the following article from TheStreet.

Homebuilder sentiment remained steady in November, with builders still experiencing strong sales conditions for new homes.

The National Association of Home Builders/ Wells Fargo Housing Market Index had a reading of 54 in November, unchanged from the downwardly revised reading in October.

The monthly survey asks builders about their perceptions of current sales conditions and expectations of future sales. They are also asked to gauge prospective buyer traffic. A reading over 50 indicates builders view market conditions as more positive than poor.

Homebuilders have been positive about market conditions for six consecutive months.

Still homebuilders appear less confident about future buyer traffic. While, the HMI index gauging current sales conditions in November held steady at 58, the component measuring expectations for future sales fell one point to 60 and the component gauging traffic of prospective buyers dropped one point to 42.

“Policy and economic uncertainty is undermining consumer confidence,” said NAHB Chief Economist David Crowe. “The fact that builder confidence remains above 50 is an encouraging sign, considering the unresolved debt and federal budget issues cause builders and consumers to remain on the sideline.”

Homebuilders are building more homes but the level of housing starts is still well below normal. Builders are facing challenges from a shortage of labor supply and materials and are being careful not to overbuild. That has helped ensure that sales conditions remain robust, even as demand for homes has slowed more recently on rising home prices and higher interest rates.

This article was republished with permission from TheStreet.

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