Builder confidence in the market for newly built, single-family homes in August rose one point to 61 on the NAHB/Wells Fargo Housing Market Index (HMI). This is the highest reading since November 2005.
“Single-family housing is making slow but steady progress,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. “However, we continue to hear that builders face difficulties accessing land and labor.”
“Today’s report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015,” said NAHB Chief Economist David Crowe. “Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year.”
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.
Two of the three HMI components posted gains in August. The index measuring buyer traffic increased two points to 45 and the component gauging current sales conditions rose one point to 66. Meanwhile, the index charting sales expectations in the next six months held steady at 70.
The West and Midwest each rose three points to 63 and 58, respectively. The South posted a two-point gain to 63 and the Northeast held steady at 46.