The nation’s home builders are in good holiday spirits this December, maintaining the same high level of confidence as the last two months, according to the National Association of Home Builders/Wells Fargo Housing Market Index released today. A new regional breakout of the index also reveals that western builders are, on the whole, the most optimistic of all their colleagues.
The December index held firm at 71, indicating there has been no discernible change in overall builder attitudes in the last three months.
“Builders have every reason for good cheer this holiday season,” NAHB President Bobby Rayburn said. “The bottom line is that buyer demand continues to keep builders busy and, like most business owners, builders are happiest when we’re busy.”
The NAHB/Wells Fargo Housing Market Index is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Each month, builders report current sales of single-family homes and prospects for sales in the next six months as either “good,” “fair” or “poor.” They also 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 sales conditions as good than poor.
A new addition to the index this month is a seasonally adjusted regional component that measures builder confidence in each of the four Census regions.
In December, the index component gauging current single-family sales remained unchanged at 77 while the component gauging expected sales in the next six months rose one point to 79 and the component gauging traffic of prospective buyers rose three points to 52.
Regional scores show the greatest confidence prevailing among western builders, followed by their counterparts in the South, Northeast and Midwest, respectively. The western index score was well above the national average, at 80.1; the southern index was also very high, at 76.1; and the northeastern index score just surpassed the national average, at 71.9. The Midwest had the lowest score, at 56.7, which still reflects a positive balance of opinion among builders in the region.
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