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Builder Confidence Rose 4 points in December to 58
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Builder confidence in the market for newly built, single-family homes improved four points to a 58 reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for December, released today. This gain reflected improvement in all three index components – current sales conditions, sales expectations and traffic of prospective buyers.
This is definitely an encouraging sign as we move into 2014. The HMI is up 11 points since December of 2012 and has been above 50 for the past seven months. This indicates that an increasing number of builders have a positive view on where the industry is going.
The recent spike in mortgage interest rates has not deterred consumers as rates are still near historically low levels. Following a two-month pause in the index, this uptick is due in part to release of the pent-up demand caused by the uncertainty generated by the October government shutdown. We continue to look for a gradual improvement in the housing recovery in the year ahead.
All three HMI components posted gains in December. The index gauging current sales conditions jumped six points to 64, while the index gauging expectations for future sales rose two points to 62. The index gauging traffic of prospective buyers gained three points to 44.
Looking at the three-month moving averages for regional HMI scores, the South edged one point higher to 57 while the Northeast, Midwest and West each fell a single point to 38, 59 and 59, respectively.
Posted: December 17, 2013 Tuesday 10:00 AM