Dive Brief:
- The National Association of Home Builders/Wells Fargo Housing Market Index rose two points in June to a score of 60, up from May's level of 58, the NAHB reported Thursday.
- All three elements within the index expanded this month, with current sales expectations up one point, sales expectations for the next six months up five points, and buyer traffic up three points.
- June's HMI mark surpassed expectations, as economists surveyed by The Wall Street Journal predicted only a one-point rise to 59.
Dive Insight:
June's results marked the highest builder confidence mark since January 2016 and followed four consecutive months of unchanged scores.
NAHB Chief Economist Robert Dietz said the high score — along with growing home sales and a strengthening economy — signals "that the housing market should continue to move forward in the second half of 2016."
However, NAHB Chairman Ed Brady added that despite the good news this month, homebuilders continue to report concerns regarding the lack of available labor and lots. Last month, the NAHB revealed that the availability of lots has reached new lows, with 64% of builders reporting that lot supply in their regions was low or very low — the highest percentage since tracking began in 1997.
The builder confidence report sets a positive tone for the housing market this month and through the rest of 2016. The strong jump in sales expectations for the next six months adds momentum to economist predictions that 2016 will be housing's "best year in a decade." Today's report will be followed by housing starts Friday and existing home sales next Wednesday.
