Home builders’ confidence in the housing market inflated to its highest reading in the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) since July 2005, indicating a renewed sense of optimism after the results of the election. The Index now reads 70.
“This notable rise in builder sentiment is largely attributable to a post-election bounce, as builders are hopeful that President-Elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability,” said NAHB Chairman Ed Brady in a statement on the reading. “This is particularly important, given that a recent NAHB study shows that regulatory costs for home-building have increased 29 percent in the past five years.”
“Though this significant increase in builder confidence could be considered an outlier, the fact remains that the economic fundamentals continue to look good for housing,” says NAHB Chief Economist Robert Dietz. “The rise in the HMI is consistent with recent gains for the stock market and consumer confidence. At the same time, builders remain sensitive to rising mortgage rates and continue to deal with shortages of lots and labor.”
The Index measure of sales expectations is up nine points to 78, while the measure of current sales conditions is up seven points to 76. The measure of homebuyer traffic is also up, six points to 53—the first time the reading has topped 50 since October 2005.
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