Wells Fargo and the National Association of Home Builders (NAHB) surveyed member homebuilders about their industry confidence levels in late December 2019. The results? The Housing Member Index hit a 10-year high, up 5 points to 75.
NAHB chair Greg Ugalde said, “Builders are continuing to see the housing rebound that began in the spring of 2019…this rebound is supported by a low supply of existing homes, low mortgage rates and a strong labor market.”
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Elements of the Housing Member Index include…
- Current sales conditions – 84 points
- Buyer traffic – 58 points
- Sales expectations over the next six-month period – 79 points
Three-month averages for the regional breakdown of the Housing Member Index look like this…
- South – 76 points
- West – 84 points
- Midwest – 63 points
- Northeast – 63 points
Obviously, the relatively surprising turnaround of home builder confidence in the West is great news. And, the continuing upbeat level of homebuilder confidence in the South mirrors continuing sales growth in this region of the country.
Robert Dietz, the chief economist of NAHB, said that he continues to be cautious about the issue of housing affordability in light of such positive confidence levels. “While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still underbuilding due to supply-side constraints like labor and land availability. Higher development costs are hurting affordability and are dampening more robust construction growth.”
Thanks to HousingWire’s Alcynna Lloyd and the National Association of Home Builders for source data.