Builder Confidence in New Construction Up for Second Straight Month

Last night on the radio I heard a report that the builder confidence index regarding new home construction was coming out today and that experts expected bad news.
I’m happy to report that they were wrong.
The National Association of Home Builders/Wells Fargo Housing Index (HMI) for November did in fact come out today, but with positive results:
Builder confidence in the market for newly built, single-family homes rose one point to 16 from a revised level of 15 in the previous month.
New Home ConstructionThe Midwest posted the largest increase in the country with a five-point gain to 18 (yay!); the West posted a three-point gain to 15, the South held even at 18 and the Northeast fell three points to 13.
“Though the gains have been incremental, the fact that builder confidence has improved over the past two months is encouraging,” said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. “Many builders are reporting that while the quantity of buyer traffic through their model homes has not improved dramatically, the quality of that traffic seems to be getting better – meaning that more people appear to be serious about buying in the near future.
Two out of the three HMI components improved this month and one stayed the same:
*The index gauging sales expectations for the next six months rose two points to 25
*The index gauging traffic of prospective buyers rose one point to 12
*The index gauging current sales conditions remained at 16
Now, keep in mind, any score above 50 indicates that more builders view conditions as good rather than poor, but at least we’re going in the right direction.
“The most positive aspect of today’s report is the future expectations component, which not only held onto the five-point gain it registered in October, but improved by an additional two points to 25 for November,” said NAHB Chief Economist David Crowe. “This is the highest that component of the HMI has been since the home buyer tax credit program spurred sales activity this spring.”