Builder confidence in the market for newly-built single-family homes held steady in November at a level of 63 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
Builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth. Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. These factors will help keep housing on a steady, upward path in the months ahead.
It is worth noting that most of the November HMI responses originated before the elections. Thus, builder confidence remained unchanged as the industry awaited the results.
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
The HMI components measuring buyer traffic rose one point to 47, and the index gauging current sales conditions held steady at 69. Meanwhile, the component charting sales expectations in the next six months fell two points to 69.
Looking at the three-month moving averages for regional HMI scores, the Northeast, Midwest and West each posted respective two-point gains to 45, 58 and 77. The South remained unchanged at 66.