The real estate market, in general, took a huge hit as the U.S market in general also took a slide downward for several reasons. However, the start of 2019 was a totally different story for the economy this time, as the economy continues to strengthen in the first quarter of the year. This sudden surge increased the optimism of those who are major players in the real estate sector like the home builders.
Alcynna Lloyd of Housing Wire wrote an article about the optimism and positivity of home builders towards the strengthening US economy, and its possible impact on the real estate market. Read the news article below to learn more.
Homebuilder Confidence Climbs as Economy Strengthens
Image Credits: Housing Wire
February marks second consecutive month of gains for all HMI indices
Declining mortgage rates partnered with a healthy economy contributed to homebuilder confidence increasing two points to 62 in February, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
Notably, February marked the second consecutive month of gains for all HMI indices.
“Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment,” NAHB Chairman Randy Noel said. “In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season.”
NAHB Chief Economist Robert Dietz said builder confidence levels moved up in tandem with growing consumer confidence and falling interest rates.
“The five-point jump on the six-month sales expectation for the HMI is due to mortgage interest rates dropping from about 5% in November to 4.4% this week,” Dietz continued. “However, affordability remains a critical issue. Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points.”
In February, the index measuring current sales conditions rose from 64 to 67 points, and buyer traffic moved forward from 44 to 48. Lastly, expectations over the next six months increased from 63 to 68 points. Read the rest of this news article here…
This is actually very good news for all home builders across the country. By keeping their confidence higher, this means that home builders’ rate as well as home repairs, improvements and renovation costs. Another reason for the confidence jump is the dropping mortgage rates in the last quarter of 2018. Its just the factors causing the confidence to drop now have bounced back.
While the first quarter of 2019 shown a significant increase in the confidence level, this trend actually started in the 3rd quarter of last year where home builders starting to feel the confidence in their sector. Steve Goldstein of Market Watch wrote an article about this trend.
Homebuilder Confidence Climbs as Economy Strengthens
Image Courtesy of Getty Image
February marks second consecutive month of gains for all HMI indices
Declining mortgage rates partnered with a healthy economy contributed to homebuilder confidence increasing two points to 62 in February, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
Notably, February marked the second consecutive month of gains for all HMI indices.
“Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment,” NAHB Chairman Randy Noel said. “In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season.”
NAHB Chief Economist Robert Dietz said builder confidence levels moved up in tandem with growing consumer confidence and falling interest rates.
“The five-point jump on the six-month sales expectation for the HMI is due to mortgage interest rates dropping from about 5% in November to 4.4% this week,” Dietz continued. “However, affordability remains a critical issue. Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points.”
In February, the index measuring current sales conditions rose from 64 to 67 points, and buyer traffic moved forward from 44 to 48. Lastly, expectations over the next six months increased from 63 to 68 points.
This is actually a very good news for all home builders across the country. By keeping their confidence higher, this means that home builders’ rate as well as home repairs, improvements and renovation costs. Another reason for the confidence jump is the dropping mortgage rates in the last quarter of 2018. Its just the factors causing the confidence to drop now have bounced back.
While the first quarter of 2019 shown significant increase in the confidence level, this trend actually started in the 3rd quarter of last year where home builders starting to feel the confidence in their sector. Steve Goldstein of Market Watch wrote an article about this trend.
The home builders confidence increase is also attributed to the overall housing market index, which bears higher consumer confidence due to lower interest rates. Jill Mislinski wrote an article about this great news for the real estate market in general, apart from rising home builder’s confidence and strengthening of the U.S economy.
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook.
The latest reading of 62 is up 4 from last month’s number.
Here is the opening of this morning’s monthly update:
Builder confidence in the market for newly-built single-family homes rose four points to 62 in February, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today in Las Vegas during the 75th annual International Builders’ Show.
“Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment,” said NAHB Chairman Randy Noel. “In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season.” Learn more about the rates here…
There you have it, having a very high home builders confidence in an uptrend U.S economy, capped with rising consumer confidence due to lowering interest rates equates to exciting times in the real estate market. This opens a lot of opportunities in the sector for homebuyers, sellers and investors alike.
Selling your home during these times is also a great opportunity. Perhaps you need the money for an emergency or to raise capital in starting a business. We at Dependable Homebuyers can help you sell your house fast and help you raise the needed money. To get started, please visit our website https://www.dependablehomebuyers.com.
Dependable Homebuyers
1402 Belt St, Baltimore, MD 21230
(443) 266-6247
