Builder Confidence Moves up in December
In December, home builder sentiment saw an upward trajectory, halting a four-month consecutive decline. The National Association of Home Builders (NAHB) attributes this positive shift to the decline in mortgage rates, which serves as a catalyst for increased builder confidence and indicates an enhancement in housing conditions.
According to HBS Dealer, although this is an improvement from the prior month, builder confidence remains well below the benchmark HMI reading of 50.
“With mortgage rates down roughly 50 basis points over the past month, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look,” said NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala. “With the nation facing a considerable housing shortage, boosting new home production is the best way to ease the affordability crisis, expand housing inventory and lower inflation.”
The HMI index gauging traffic of prospective buyers in December rose three points to 24, the component measuring sales expectations in the next 6 months increased points to 45, and the component charting current sales condition held steady at 40.
“The housing market appears to have passed peak mortgage rates for this cycle, and this should help to spur home buyer demand in the coming months, with the HMI component measuring future sales expectations up 6 points in December,” said NAHB Chief Economist Robert Dietz.
