Good News for New Home Construction

Builders are building confidence in the new-home market.
The National Association of Home Builders/Wells Fargo Housing Market Index was released today to show that builders confidence in the market for newly built, single-family homes rose in October for the first time in five months.
Happy construction guyAnalysts expected the confidence index to remain at 13; instead, it increased three points to 16, a level not seen since June of this year.
All three of the HMI’s component indexes rose in October:
*Current sales conditions; gained three points to 16
*Sales expectations over the next six months; gained five points to 23
*Traffic of prospective buyers; gained two points to 11
“The new-homes market is finally moving past the lull that occurred when the home buyer tax credits expired and economic growth stalled this summer,” said NAHB Chief Economist David Crowe.
“While challenges such as competition from foreclosures, inaccurate appraisal values, and general consumer uncertainty about the economy and job market continue to be major factors, builders have seen a slight increase in consumers who are considering a home purchase.”
Crowe said the toughest obstacles involve financing; the scarcity of construction credit for builders and tougher mortgage requirements for buyers.
But that’s a whole other story that has yet to fully develop.