Builder confidence held steady in November, and came in in-line with expectations, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
Homebuilders were not alone in their increased calm before the election. Consumers grew more confident in the economy the month leading up to the presidential election. The Index of Consumer Sentiment increased 5% in October, according to the Survey of Consumers conducted by the University of Michigan.
“Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector,” NAHB Chief Economist Robert Dietz said. “This will help keep housing on a steady, upward glide path in the months ahead.”
The HMI came in at 63 in November, unchanged from the month before. This came from the consensus taken just before the elections.
“With most of our members responding before the November elections, confidence levels remained unchanged as they awaited the results,” said NAHB Chairman Ed Brady, a home builder and developer. “Still, builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth.”
Derived from a monthly survey that NAHB has been conducting for 30 years, the index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair or poor. The survey also asks builders to rate traffic of prospective buyers as high to very high, average or low to very low. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Components that measured buyer traffic rose one point to 47, and the index that measures current sales stayed the same at 69. On the other hand, the index that charts sales expectations in the next six months fell two points to 69.
“The NAHB/Wells Fargo Housing Market Index remained flat in November at a strong level, which suggests continued strong demand from homebuyers for new housing,” Nationwide Chief Economist David Berson. “The survey shows that homebuilders confidence in the direction of the new home market continues to grow.”