Home Builder Confidence Increases in May Despite Drops In Housing Production

The National Association of Home Builders in association with Wells Fargo released their May housing market index.  The survey shows that home builder confidence for newly-built single-family homes increased two points to a level of 70 in May.  A number over 50 indicates that more builders view conditions as good than poor.  This reading marked the fourth time the HMI (Home Market Index) reached 70 or higher this year.  Although builder confidence remains high, housing production fell 3.7 percent in April to a seasonally adjusted annual rate of 1.29 million units according to the data from the U.S. Department of Housing and Urban Development and the Commerce Department.

NAHB Chairman Rany Noel states  “The solid May report shows that builders are buoyed by growing consumer demand for single-family homes.  However, the record-high cost of lumber is hurting builders’ bottom lines and making it more difficult to produce competitively priced houses for newcomers to the market.”

Optimism in the housing market is further forecast by the growing economy and demand for housing says Robert Dietz, Chief Economist for the NAHB.  “Tight housing inventory, employment gains and demographic tailwinds should continue to boost demand for newly-built single-family homes.  With these fundamentals in place, the housing market should improve at a steady, gradual pace in the months ahead.”

Overall production of housing is mostly attributable to multi-family startups.  Multi-family construction fell 11.3% to a seasonally adjusted annual rate of 393,000 units. Single-family construction remained was revised upwardly 0.1% percent to 894,000 units for March.

Reiterating mostly what Mr. Noel stated about costs associated with construction, Mr. Dietz believes that construction stats for single family homes are positive but builders have some hurdles with increases in prices of supplies.  “Single-family starts are up 8.3 percent for the first four months of the year relative to the start of 2017, which is higher than our forecast and bodes well for the rest of the year. However, builders must manage supply-side hurdles, such as ongoing building material price increases and shortages of land and labor, to meet growing housing demand. Lumber prices continue to rise, with recent increases adding more than $7,000 to the price of an average single-family home.”

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/home-builder-confidence-increases-in-may-despite-drops-in-housing-production/

Home Builder Confidence Remains Strong But Drops Slightly From Previous Months

The National Association of Home Builders (NAHB) and Wells Fargo released their March report on home builder confidence and it shows that home builder sentiment remains strong although has slipped from the record highs of previous months.   The Housing Market Index (HMI) indicates that there has been a decrease of one point to 70 in March.  This is a slight reduction from the readings of February which was revised to 71.  December saw the highest post-recession readings of a 74.

Based on a monthly survey NAHB conducts, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Any number over 50 indicates that more surveyed builders viewed conditions as good than poor.

With respect to current sales, the HMI survey showed that confidence held steady at a 77.  Sales for the next six months expectations dropped 2 points to a 78.  In the Northeast, builder confidence increased 1 point to a 56.  Previous months saw builder confidence drop 5 points in February so positive sentiment is seeing an upswing in our area.

NAHB Chairman Randy Noel  said “Builders’ optimism continues to be fueled by growing consumer demand for housing and confidence in the market. However, builders are reporting challenges in finding buildable lots, which could limit their ability to meet this demand.

Challenges aside, there is optimism of continued growth in home building for the future.  Robert Dietz, Chief Economist for the NAHB believes so in stating "A strong labor market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise. With these economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead.”

 Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/home-builder-confidence-remains-strong-but-drops-slightly-from-previous-months/