Home Builder Confidence Rises to Highest Point Since 2007
Builder confidence in the market for newly built single-family homes rose for the second consecutive month in May to its highest level in more than two years, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI, based on a monthly survey, rose to its highest level since August 2007. Based on a 100-point scale, the HPI measures builder perceptions of current single-family home sales and sales expectations for the next six months. Scores over 50 indicate more builders view sales conditions as good than poor. The national HPI ticked up to three points to 22 in May, and the HPI gained in every region. The Northeast rose 14 points to 35, its highest level since June 2007. The Midwest posted a two-point gain to 17, while the South rose a single point to 22 and the West jumped seven points to 20. “Builders surveyed for the HMI at the beginning of May were undoubtedly reacting to the heightened consumer interest they had just witnessed as the deadline for home buyer tax credits arrived at the end of April,” said NAHB chairman Bob Jones. “Builders are also hopeful that the solid momentum that the tax credits initiated will continue even now that those incentives are gone.” According to the HPI, sales are expected to gain in over the next six months, despite the expiration of the first-time home buyer tax credit. Indeed, broker sources tell HousingWire some sellers are taking anywhere from $6,500 to $8,000 off the asking price, to encourage purchases in lieu of the first time homebuyer tax credit. Write to Diana Golobay. Disclosure: the author holds no relevant investments.