Residential home builders are more optimistic now than they have been in more than a decade. The biggest improvement was in the Northeast.
A reflection of
single-family home builder sentiment, the Housing Market Index, landed at 70 in December — the highest level since July 2005.
A monthly index that exceeds 50 is an indication that more of the nation’s home builders view market conditions as good than those who don’t.
The index leapt from November 2016, when it was 63, and December 2015, when it came in at 60.
The National Association of Home Builders, which
produces the index in conjunction with Wells Fargo, announced the latest reading Thursday,.
“This notable rise in builder sentiment is largely attributable to a post-election bounce, as builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability,” NAHB Chairman Ed Brady said in the report. “This is particularly important given that a recent NAHB study shows that regulatory costs for home building have increased 29 percent in the past five years.”
On a three-month moving average, the index was 51 in the Northeast, surging six points from a month earlier.
A three-point gain from November’s average put the index at 61 in the Midwest. The West was up two points to 79, and the South inched up a point to 67.
The U.S. index is comprised of three components, including sales expectations for the next six months, with that index surging nine points to 78.
A seven-point gain left the
component gauging current sales conditions at 76.
At 53, the
component measuring buyer traffic was up six points from November. It was the first time above 50 for this gauge since October 2005.
