Home Builder Confidence Rises Along with National, Florida Mortgage Demand
Home builders are growing increasingly more confident about the economy and the real estate market. Such an attitude was reflected in the most recent report on residential construction in the U.S. for the month of January.
The National Association of Home Builders and Wells Fargo released their Housing Market Index (HMI) last week. This survey reflects the confidence NAHB member builders have in the present and the future of the national and Florida housing market:
- The HMI increased from an upwardly revised figure of 33 in December to 35 this month - the highest level the index has achieved in seven months.
Any individual or combined score over 50 indicates that more builders view sales conditions as good than as poor.
Two of the three component indexes registered improvement in January. Current home sales and buyer traffic each gained three points - to 36 and 26 respectively; sales expectations for the next six months were unchanged from December at 49.
NAHB Chief Economist David Seiders said of the index:
“The same factors that were evident at the end of 2006 continue to hold true in today’s housing market - improving affordability measures, strengthening consumer assessments of home buying conditions, and an upswing in applications for [Florida mortgages] to buy homes. Builders are starting to see that the worst is behind them and that buying conditions have improved to the point that greater optimism is warranted.”
The U.S. Census Bureau and U.S. Department of Housing and Urban Development released their monthly report on new residential construction in December. The Census Bureau report lags the NHBA survey by a month but still indicates that builders are putting down hard cash to back up their perceptions which were evident even in December that life is getting better.
Housing permits were issued (by areas that require them) at a seasonally adjusted annual rate of 1,596,000, 5.5 percent above the rate reported in November - but still a substantial 24.3 percent below the estimated rate of 2,107,000 reported in December 2005.
The bulk of this improvement, however, was in multiple family housing. Permits for projects with two to four units were up over 27 percent while large developments - over 5 units - increased 17.3 percent. Single family home permits were only up 1.2 percent.
Actual housing starts in December were at an annual rate of 1,642,000, 4.5 percent above revised November figures but still behind the December 2005 pace by 18 percent. Nevertheless, it appears as though an uptick on Florida home mortgage loan demand is leading to improved figures.
