“In view of the low housing stock, it’s a great time to rekindle opportunities in the new construction side of our business,” Moline said. “Renew any builder relationships that may have stalled during the downturn. In other words, if you don’t already have one, get out there and build a builder.”
The NAHB/Wells Fargo Housing Market Index 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.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
According to the report, all three HMI components posted gains in July. The component gauging current sales conditions rose five points to 60 – its highest level since early 2006. Meanwhile, the component gauging sales expectations in the next six months gained seven points to 67 and the component gauging traffic of prospective buyers rose five points to 45 – marking the strongest readings for each since late 2005.
All four regions also posted gains in their HMI scores’ three-month moving averages. The Northeast showed a four-point gain to 40 while the Midwest reported an eight-point gain to 54, the South posted a five-point gain to 50 and the West measured a three-point gain to 51.
“It’s pretty clear that with the economy no longer on life support, the outlook and the opportunities today are boundless,” Moline added. “Inventory shortages are beginning to ease now as prices rise and more sellers come out from under water. It’s a time to set our sights on responsible ways to build for the future.”
For more information on the NAHB/Wells Fargo Housing Market Index, visit NAHB.org.