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Builder Confidence Increases for June

By Allison Halliday | June 22, 2015

The National Association of Home Builders/Wells Fargo Housing Market Index was recently released and shows the highest reading since September 2014. During June builder confidence in the market for newly built, single-family homes rose by five points to reach a level of 59.

Apparently more builders are reporting greater numbers of serious and committed buyers at their job sites, a fact that is being reflected in the recent government data which shows that new home sales and single-family construction are both gaining momentum. The recent index measures the current and future sales expectations and shows they are at their highest levels since the fourth quarter of 2005. As such, builders are increasingly optimistic that the housing market will continue to strengthen during the coming months. In spite of this optimism, the chief economist for the National Association of Home Builders, David Crowe points out that builders are still sensitive towards the consumer’s ability to purchase a new property.

The National Association of House Builders has been conducting this monthly survey for 30 years. The monthly index gauges builder perceptions of single family home sales as well as sales expectations for the next six months. Builders can rate these expectations as being poor, fair or good. In addition, the survey also asks builders to look at the numbers of prospective buyers and to rate them from being very low or low, to average or from high to very high. All these scores are used to calculate a seasonally adjusted index and any figure over 50 indicates that more builders view conditions as being good rather than poor.

All three of the Housing Market Indices showed healthy gains for June. The component for gauging current sales conditions increased by seven points to 65 while the index gauging sales expectations for the next six months increased by six points to 69 and the component measuring the numbers of prospective buyers increased by five points to 44.

The survey also looked at the three month moving averages for regional Housing Market Index scores. In the South and North East, each Index rose 3 points to reach 60 and 44 respectively. The index gained two points in the West to reach 57; while in the Midwest it dropped by just one point to 54.

Allison Halliday is a Realty Biz News contributing writer. She handles International Real Estate and is a seasoned blogger.
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