The NAHB/Wells Fargo Housing Market Index rose for its eighth straight month to 47, a two-point increase from the revised November level of 45. Both sales component indexes, present and expected, are above the 50 tipping point where more builders see a better market than see a poorer market. The December index is at the highest level since April 2006.
On a three-month moving average basis, three of the four census regions also rose to levels last seen five to seven years ago. The Midwest index is 48 and the highest since July 2005; the South is at 46 and the highest since July 2006; the Northeast is at 35 and the highest since May 2007. The West index was unchanged at 47.
Builders continue to express difficulties with buyers’ obtaining mortgage credit, with appraisals under the contract price and with competition against distressed sales. Builders also expressed concern over the ‘fiscal cliff’ consequences. Emerging issues include lot and labor shortages and price spikes on some building materials.