Dive Brief:
- The National Association of Home Builders/Wells Fargo Housing Market Index rose two points in August to a score of 60, up from July's downwardly revised level of 58, the NAHB reported Monday.
- Within the index, current sales conditions and sales expectations for the next six months each increased, while buyer traffic slipped one point.
- August's HMI score surpassed expectations, as economists surveyed by MarketWatch expected the index to remain unchanged at 59.
Dive Insight:
NAHB Chairman Ed Brady pointed to increased construction and new homes sales activity as the drivers of August's rise in builder confidence. Last month, the Commerce Department reported housing starts rose 4.8% in June to an annual rate of 1.19 million units, and new single-family home sales increased 3.5% in June to an annual rate of 592,000.
"Builder confidence remains solid in the aftermath of weak GDP reports that were offset by positive job growth in July," NAHB Chief Economist Robert Dietz said in a release. "Historically low mortgage rates, increased household formations and a firming labor market will help keep housing on an upward path during the rest of the year."
As tight inventory concerns continue to plague the housing market, August's higher score could signal that builders are feeling more confident to ramp up new construction and add properties to the currently scarce supply — something that real estate agents and experts have encouraged for months.
The HMI is the first in the month's string of housing market reports that will offer a clear picture of the residential industry's health. Monday's report will be followed by housing starts Tuesday, new home sales Aug. 23, existing home sales Aug. 24 and pending home sales Aug. 31.
