The first of several real estate market trends reports due this week bodes well for the housing market.
Builder confidence in the market for newly-built single-family homes hit “a significant milestone” in June, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released Monday. The Index surged eight points to a reading of 52, the first time the HMI have been about 50 since April 2006. Any reading over 50 indicates that more builders view sales conditions as good than poor.
The eight-point jump in the Index was the biggest one-month gain since August and September of 2002, the NAHB reported.
Builders are experiencing some relief in the headwinds that are holding back a more robust recovery,” said NAHB Chief Economist David Crowe. “Today’s report is consistent with our forecast for a 29 percent increase in total housing starts this year, which would mark the first time since 2007 that starts have topped the 1 million mark.”
The HMI is dereived from a monthly survey the NAHB has been conducting for 25 years. It gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either “good,” “fair” or “poor.” The survey also polls builders as to whether the traffic of prospective buyers is “high to very high,” “average” or “low to very low.”
Each HMI component gained in June, the NAHB reported. The component gauging current sales conditions increased eight points to 56, while the index measuring expectations for future sales rose nine points to 61, its highest level since March 2006. The index gauging traffic to prospective buyers rose seven points to 40.
Regionally, the West fell one pojnt to 48, while the South registered a four-point gain to 46. The Northeast and Midwest posted a oine-point and three-point gain to 37 and 47, respectively.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.