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Builder Confidence Remains Solid in October
October 18, 2016 $HBP

Builder confidence in the market for newly constructed single-family homes remained on firm ground in October, down two points to a level of 63 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“Even with this month’s drop, builder confidence stands at its second-highest level in 2016, a sign that the housing recovery continues to make solid progress,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “However, builders in many markets continue to express concerns about shortages of lots and labor.”

“The October reading represents a mild pullback from a jump in September, and indicates that the housing market continues to make slow and steady gains,” said NAHB Chief Economist Robert Dietz. “Moreover, mortgage rates remain low and the HMI index measuring future sales expectations has been over 70 for the past two months. These factors will sustain continued growth in the single-family market in the months ahead.”

Derived from a monthly survey that NAHB has been conducting for 30 years, 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 for 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.

Two of the three HMI components posted losses in October. The component gauging current sales conditions dropped two points to 69 and the index charting buyer traffic fell one point to 46. Meanwhile, the index measuring sales expectations in the next six months rose one point to 72.

Looking at the three-month moving averages for regional HMI scores, the West increased two points to 75 while the Northeast, Midwest and South each posted one-point gains to 43, 56 and 65, respectively.

Editor's Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.


Remodeling Market Optimism Strengthens in Third Quarter
October 20, 2016

The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 57 in the third quarter of 2016, an increase of four points from the previous quarter and also a return to levels seen consistently throughout 2015.

An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.

“Remodelers nationwide are seeing increased demand for major and minor addition jobs and calls for bids, leading to an increase in both current and future market indicators,” said 2016 NAHB Remodelers Chair Tim Shigley, CAPS, CGP, GMB, GMR, a remodeler from Wichita, Kan. “However, ongoing labor shortages continue to challenge their ability to meet the increased demand.”

The RMI’s current market conditions index rose to 56, up two points from the previous quarter. Among its components, major additions and alterations also gained two points, rising to 54. The component measuring demand for smaller remodeling projects increased by three points to 56 and the home maintenance and repair component rose by three points to 59.

Indicating optimism in market strength, the RMI’s future market indicators increased by five points from the previous quarter to 58. Among its four components, calls for bids and appointments for proposals both increased six points to 59 and 58, respectively, the backlog of remodeling jobs increased five points to 58 and the amount of work committed rose two points to 55.

“The Remodeling Market Index is consistent with NAHB’s forecast of gradual and steady improvements in residential remodeling activity,” said NAHB Chief Economist Robert Dietz. “This segment of our industry is being supported by rising home values and steady consumer confidence.”

For the full RMI tables, please visit www.nahb.org/rmi. For more information about remodeling, visit www.nahb.org/remodel.