The National Association of Home Builders’ (NAHB) and Wells Fargo’s monthly measure of builder confidence and market conditions held steady at its highest point of the year, according to data released Monday.
The Housing Market Index (HMI) clocked in at 70 in November, according to the data, the same as in October.
“Single-family builders are currently reporting ongoing positive conditions, spurred in part by low mortgage rates and continued job growth,” NAHB Chairman Greg Ugalde said. “In a further sign of solid demand, this is the fourth consecutive month where at least half of all builders surveyed have reported positive buyer traffic conditions.”
HMI is a weighted average of separate indices for three single-family data points. It asks respondents to rate the market conditions for the sale of new homes at present and in the next six months, as well as the traffic of prospective buyers of new homes. It falls in a range of 0-100.
The index measuring current sales conditions fell two points to 76 while the index measuring the traffic of prospective buyers dropped one point to 53. The measure charting expectations in the next six months rose one point, to 77.
“We have seen substantial year-over-year improvement following the housing affordability crunch of late 2018, when the HMI stood at 60,” NAHB Chief Economist Robert Dietz said in a statement. “However, lot shortages remain a serious problem, particularly among custom builders. Builders also continue to grapple with other affordability headwinds, including a lack of labor and regulatory constraints.”