From 65, builder confidence for brand new single-family homes is now down by three points at 62 in November 2015, based on National Association of Home Builders/Wells Fargo Housing Market Index's upwardly revised October reading, World Property Journal reports.
"Even with this month's drop, builder confidence has remained in the 60s for six straight months -- a sign that the single-family housing market is making long-term headway," says Tom Woods, chairman of NAHB and a Blue Springs, Mo builder. "However, our members continue to voice concerns about the availability of lots and labor."
For NAHB's Chief Economist, David Crowe, "The November report is pullback from an unusually high October, and is more in line with the consistent, modest growth that we have seen throughout the year." "A firming economy, continued job creation and affordable mortgage rates should keep housing on an upward trajectory as we approach 2016."
For the past 30 years, NAHB has been conducting monthly surveys of the market index gauging builder perceptions of current single-family home sales and sales expectations in a 6-month projection by description of "good", "fair" or "poor". In the survey, builders are being asked to rate traffic of prospective buyers as "high to very high," "average" or "low to very low". When the scores come up for each component, these are then utilized to calculate a seasonally adjusted index where a result of at least 50 translates to builders' perception of the market condition as good than poor.
In November, two out of the three Housing Market Index components posted losses. From 75 points, a 6-month projection of the index measuring sales expectations was down by 5 points to just 70, while there is a three-point decrease in the component gauging current sales conditions at 67 points. The index charting buyer traffic, on the other hand, is up by one point at 48.
Based on regional HMI scores in the span of three months, the West saw a four-point increase at 73 while the Northeast is at 50 points with a three-point increase. While the Midwest and South didn't move at steady 60 and 65 points, respectively.
