The National Association of Home Builders (NAHB) and Wells Fargo released the latest Housing Market Index this month, which showed continued stability and growth in the housing market and overall positive expectations among builders nationwide.
The NAHB Housing Market Index is a monthly report rating traffic through new home communities and expectations in relation to sales and growth. It has been conducted for the past 25 years. This most recent report reflects an overall decrease of one point to 46, on a scale where more than 50 indicates builders feel the market is good versus poor or fair. On the whole, the February report indicates stability in builder confidence, hovering close to its strongest rating since May 2006.
There are several components to the Housing Market Index, one of which relates to sales expectations. The component reflecting sales expectations for the next 6 months rose one point to 51, demonstrating a national trend of increasing demand for new homes. While issues such as the rising cost of building materials and uncertain job growth do continue to factor into the figures, 2012 showed solid gains and moderate growth. NAHB Chairman Rick Judson, himself a North Carolina home builder, predicts moderate growth for 2013, tempered slightly by previously mentioned issues such as cost of materials, availability of labor in some regions, and customers’ ability to access mortgage credit.
According to Lawrence Yun, Chief Economist for the National Association of REALTORS® (NAR) predicts increasing demand for new homes with the potential for shortages and rapid price gains. It would seem that the nation’s homebuyers are indeed ready and willing to purchase new homes at an increasing pace. In fact, NAR predicts new home sales will grow from 368,000 in 2012 to as many as 575,000 in 2013.
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Sources:
–NAHB® National Association of Home Builders
-New construction rises from the ashes, Baldwin Park Living