Builders Remain Largely Upbeat In April
April 18, 2005
Strong demand for new single-family homes is helping buoy builder confidence as the market heads into the late spring selling season, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.
The April HMI edged down by three points to 67 but remained within the strong 67-71 confidence range that builders have held throughout the past 14 months.
“Builders continue to express confidence in the overall housing market and expect sales to remain strong during then next six months,” said NAHB President Dave Wilson, a custom home builder from Ketchum, Idaho.
“Favorable market conditions and the appeal of homeownership continue to fuel demand,” said NAHB Chief Economist David Seiders. “Many builders are reporting higher lot prices and some difficulty in finding available land, both symptoms of strong demand for new homes. NAHB expects both home sales and house values to remain healthy in coming months,” he added.
The NAHB/Wells Fargo Housing Market Index (HMI) is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Each month, builders report current sales of single-family homes and prospects for sales in the next six months as either “good,” “fair” or “poor.” They also rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
The component index gauging current single-family sales remained at a solid 73 while the component index gauging sales expectations for the next six months and the component gauging traffic of prospective buyers were 76 and 50, respectively.