As predicted, The National Association of Home Builders released today the current housing market index of 58, unchanged from the previous three months, according to a release by Econoday.
This index is based on a survey where respondents from the National Association of Home Builders are asked to rate the economy and housing market conditions. The index is a weighted average of these indexes: present sales of new homes, sale of new homes expected in the next six months and traffic of prospective buyers in new homes.
The current housing market index of 58 shows continued confidence levels among builders. Present sales, although dropping two points to 63, are leading, followed by six-month sales which jumped one point to 62, and finally, traffic at an increase of one to make 44.
Regionally, the West is ahead at 67, whereas the South continues to be 59. The Midwest follows closely behind at 56. The Northeast, which is the smallest for new homes, trails behind at 44.
New job availability and low mortgage rates are promising for the new housing outlook. On the other hand, low traffic reflects the lack of participation by first-time buyers who continue to prefer rent.
This chart shows the history of the housing market index:
Click to Enlarge