Strong Builder Confidence a Good Sign for Chicago New Homes

October 21, 2012

chicago new home builders confident For the sixth month in a row, builder confidence in the housing market has increased. According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) the builder confidence index is at 41, which is the highest level since June 2006. As far as regional improvement is concerned, the builder index increased two points in the Midwest, and also shows small increases in the west as well.

Many builders say that their strengthened confidence is due to an increase in the demand for new homes as well as many home buyers visiting builders’ offices and showing an interest in these homes.

The NAHB has been conducting this survey for more than 25 years, and any number higher than 50 indicates that a majority of builders view sales conditions as good instead of poor. In recent months, the number hasn’t been able to quite push past 50. Tight credit, problems with appraisals and potentially limited inventory has been an issue for some home builders.

However, it is important to note that an index of 41 is the strongest level recorded since June 2006, which is certainly a good sign for the Chicago new homes market.

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