Builder Confidence Bounces Up Four Points in August

Washington, DC, August 15, 2017-Builder confidence in the market for newly-built single-family homes rose four points in August to a level of 68 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

Builder sentiment is being supported by ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence. The fact that builder confidence has returned to the healthy levels we saw this spring is consistent with the NAHB forecast for a gradual strengthening in the housing market. GDP growth improved in the second quarter, which helped sustain housing demand. However, builders continue to face supply-side challenges, such as lot and labor shortages and rising building material costs.

All three HMI components posted gains in August. The component gauging current sales conditions rose four points to 74 while the index charting sales expectations in the next six months jumped five points to 78. Meanwhile, the component measuring buyer traffic increased a single point to 49.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 48. The West, South and Midwest all remained unchanged at 75, 67 and 66, respectively.