Dive Brief:
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After reaching a near-10-year high in July, builder confidence in the market for new, single-family homes edged up even further in August, the National Association of Home Builders reported on Monday.
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The NAHB/Wells Fargo Housing Market Index climbed for the third month running after an unexpected dip in May, a signal that “single-family housing is making slow but steady progress,” NAHB Chairman Tom Woods said in a statement.
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Builders in the South and the West are the most optimistic about the near future of the new-home market, with scores in both regions reaching 63 on the index in August. Any score higher than 50 indicates that more builders than not have a positive outlook for the coming six months. In the Midwest, builders scored 58 on the index, and in the Northeast, they held steady at 46. The overall national number rose to 61, one point higher than in July.
Dive Insight:
The level of builder optimism matches the positive forecast by the NAHB for a gradual strengthening of the single-family home sector in 2015. NAHB Chief Economist David Crowe on Monday predicted job and economic gains will “keep the market moving forward at a modest pace” for the rest of the year.
Housing market analysts agreed with Crowe’s assessment. “The overall message from the survey... is very upbeat,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a client note on Monday, The Wall Street Journal reported. “We see nothing here to change our view that a real recovery in the housing market is finally underway.”
Still, Woods said, scarce available land and a tight supply of qualified construction labor are tempering both builder optimism and the pace of the housing recovery.
Builder confidence has been in positive territory for a year, following five months of declines in early 2014.
