Monday, December 16, 2019

NAHB: Builder Confidence Increased to 76 in December, Highest since 1999

by Calculated Risk on 12/16/2019 10:08:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 76, up from 71 in November. Any number above 50 indicates that more builders view sales conditions as good than poor.

From NAHB: Builder Confidence Ends Year Strong on Solid Economic Fundamentals

Builder confidence in the market for newly-built single-family homes increased five points to 76 in December off an upwardly revised November reading, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. This is the highest reading since June of 1999.

“Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn.

“While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still underbuilding due to supply-side constraints like labor and land availability,” said NAHB Chief Economist Robert Dietz. “Higher development costs are hurting affordability and dampening more robust construction growth.”

All three HMI components registered gains in December. The HMI index gauging current sales conditions rose seven points to 84, the component measuring sales expectations in the next six months edged up one point to 79 and the measure charting traffic of prospective buyers increased four points to 58.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell two points to 61, the Midwest increased five points to 63, the South moved one point higher to 76 and the West rose three points to 84.
emphasis added
NAHB HMI Click on graph for larger image.

This graph show the NAHB index since Jan 1985.

This was well above the consensus forecast.