Home-Builder Confidence Up

October 18, 2011

For the first time in a long time, builders have gained a decent amount of confidence in the new-home market.

According to the National Association of Home Builders/Well Fargo Housing Market Index, builder confidence in the market for newly built, single-family homes rose four points to 18 in October.

That’s the best score since May 2010 and the largest one-month gain since April 2010, when the Federal Home Buyer Tax Credit program was helping spur activity.

Analysts had expected a lowly one-point increase to 14.

Chief of construction on a building site.“This latest boost in builder confidence is a good sign that some pockets of recovery are starting to emerge across the country as extremely favorable interest rates and prices catch consumers’ attention,” said NAHB Chief Economist David Crowe.

“However, it’s worth noting that while some builders have shifted their assessment of market conditions from ‘poor’ to ‘fair,’ relatively few have shifted their assessments from ‘fair’ to ‘good.'”

Still, we’ll take any positive move in the right direction in this tough economy.

Each of the HMI’s rose substantially this month:

*The component gauging current sales conditions rose four points to 18.

*The component gauging sales expectations over the next six months rose seven points to 24.

*The component gauging traffic of prospective buyers rose three points to 14.

The Midwest gained four points this month to 15; the South rose four points as well to 19 and the Northeast remained unchanged at 15.

The West jumped four points to 21; that’s the region’s highest HMI score since August of 2007.

Categories: Economy, New Homes

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