Builders’ Sentiment Steady

Single-family home builders sentiment remained near the same level established in June 2015. The NAHB/Wells Fargo Housing Market Index fell one point to 61 in December. The index has been between 60 and 62 for six of the last seven months with only October rising briefly to 65. The three components mirrored the trend with current sales falling one point to 66, future expectations down two points to 67 and traffic down two points to 46.

The year-over-year changes continue to mirror single-family construction with the overall index up three points from December last year, year-to-date single-family starts up 10 percent and year-to-date new home sales up 15 percent.

HMI & Starts
Builders continue to be slowed by the lack of existing home inventory for sale. Fewer existing home sellers result in fewer potential home buyers and most new home buyers come from selling their former home. Supply headwinds have slowed delivery times as builders compete for workers. Hiring in the home building industry has increased faster than other industries in the past several months although tightness continues.

All of the regions three month moving average indexes are at or above 50. Regionally, the West’s three month moving average index increased three points to 76 and the Northeast rose one point to 50, the first time since May 2006. The Midwest is down two points to 58 and the South down one point to 64.

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