By Jay McKenzie
Builder confidence jumped nearly 21% in July versus June 2012. What does that mean for you?
An hour ago, the National Association of Home Builders (NAHB) released the NAHB/Wells Fargo Housing Market Index (HMI) for July. Builder confidence in the market for newly built, single-family homes rose six points — nearly 21% — to a reading of 35 in July. That’s a sharp jump over June’s level of 29.
For those of you keeping score at home, that’s the largest one-month gain recorded by the index in nearly a decade. It propels the Housing Market Index to a five-year high last seen in March 2007.
For 25 years, the Housing Market Index has measured new home sales, model home buyer traffic and builder confidence. It’s based on weighted data from 400 representative builders across the nation. And it’s proven to be a very reliable predicto
r of new home sales.
Still not convinced that now is a great time to take advantage of all-time low mortgage rates and buy a new home? Here are some additional, compelling facts from last week’s NAHB Mid-Year Update and Forecast; they point to a robust market recovery dating back to last fall. Since September 2011:
- Building permits are up 26.6% nationally.
- Permits for single-family homes are up 15.4%.
- Existing home sales are up 6.6%.
- New home sales are up a much stronger 21%.
- Housing prices are up slightly nationally — and up significantly in many markets.
While announcing the largest advance in a decade in the Housing Market index, Barry Rutenberg, chairman of the National Association of Home Builders, said “Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved,”
Rutenberg added, “This is greater evidence that the housing market has turned the corner as more buyers perceive the benefits of purchasing a newly built home while interest rates and prices are so favorable.”
Jay McKenzie heads up content for NewHomeSource.com