Homebuilder Confidence has given us a reason for housing market optimism this week. National Association of Home Builders and Wells Fargo reported that homebuilder confidence has risen to 71 points in October. This is the highest and most positive reading since February of 2018. At Palm State Mortgage Company, we have explained this index in previous blogs. However, just to refresh your knowledge of the term, the Housing Market Index or HMI refers to a monthly survey of “NAHB members designed to take the pulse of the single-family housing market.”
Homebuilder Confidence Index and Renewal of Optimism in the Housing Market
The NAHB and Wells Fargo Housing Market Index ask its respondents for a simple rating of good, fair or poor. Builders are also asked to rate prospective buyer traffic from very low to very high. In other words, understand that the scores are used to calculate a seasonally adjusted index. And most importantly, any rating of 50 or over indicates positive sentiment. This is a rating that is worth celebrating. So now you know why we are optimistic about the housing market and why we are encouraging new buyers.
The survey asks builders to rate some basic housing market factors:
- The sale of new homes,
- The traffic of new home buyers
- As well as prospective new home buyers,
- They are asked to rate the scores not only for the present time but to project into the future, 6 months into current housing market conditions.
The good overall good score of 71% does not reflect the gloom and doom we hear from various financial prophets. Those are the forecasters who continually report poor aspects for our recovering economy. As we see it, today’s “low-interest-rate environment and a strong job market propelled homebuilder confidence to 71 points…”
A Note to October House Hunters
That certainly sounds like good news for some of the more hesitant house hunters out in this gentle fall weather. We’ve seen you pausing and dreaming on the doorsteps and pathways of the central Florida houses. So, these dreams and our rising economy could lead you to the simple pleasure of homeownership. And so, we renew our invitation to you. Let us help you find your future financing in our quiet, no-pressure atmosphere. Our friendly, laid back staff here at Palm State Mortgage Company delights in assisting you.
Homebuilder Confidence Data Details
We happily bring you this report, according to the index. This October’s level now marks the highest reading for homebuilder confidence since February of last year. This prompted NAHB Chairman Greg Ugalde to make this statement. “The housing rebound that began in the spring continues… It is “supported by low mortgage rates, solid employment rate, and a reduction in new home inventory.”
Let’s break down the data. The October index raised current sales conditions to 78 points. Likewise, traffic increased to 54 points. Then, we saw sales expectations leap to 76. These good numbers are multiplied by a look at the last few months. NAHB Chief Economist Robert Dietz stated, “The second half of 2019 has seen steady gains in single-family construction. And this is mirrored by the gradual uptick in builder sentiment over the past few months.”
Seeing All Sides of the Homebuilder’s Confidence Statistics
However, just to prove that we are not wearing the rose-colored glasses of unwarranted optimism, we also quote Economist Robert Dietz “Builders continue to remain cautious due to ongoing supply-side constraints and concerns about a slowing economy.”
And here is the statistical breakdown according to the Homebuilders Confidence Index in geographic areas of the US:
1. The 3-month moving averages for regional HMI scores in the Northeast escalated up 60 points
2. Even Better, the South climbed to 73 points.
3. Likewise, the West advanced to 78 points,
4. and the Midwest stepped up to 58 points.
The Homebuilder’s Confidence Index provides us with a barometer of the energy in the housing market.
Dreams of Your New Home
While you are dreaming about a new home, here are a couple of quotes to guide those dreams.
Home is where the heart can laugh without shyness.
Home is where the heart’s tears can dry at their own pace.
A house is made with walls and beams;|
A home is built with love and dreams.
Ralph Waldo Emerson
Thank you for reading our blog. Also, please feel free to visit Palm State Mortgage Company.
We enjoy sharing the latest information on the housing market and more importantly, assisting you with home financing.