Susan Deierling, Assoc. Broker
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Realty Executives Northern Arizona
Tag Archives: Housing Market Index
The National Association of Homebuilders (NAHB) Housing Market Index ended its 8-month winning streak this month, posting a value of 47. The January 2013 reading is on level with last month, and remains at a near 7-year high.
The Housing Market Index (HMI) is a measure of home builder confidence.
HMI readings below 50 indicate a “poor” new construction conditions for single-family homes nationwide; ratings above 50 signal “good” ones.
Not since April 2006 has the Housing Market Index crossed into “good” territory, but the past two years have witnessed the HMI nearly triple; and the index is up from a reading of 25 just twelve months ago.
Values would have likely increased this month, too, if not for builder uncertainty. The NAHB cites concern over prolonged legislative decisions as contributing factors to this month’s builder confidence reading. Specifically, the trade group expressed concern over the future of the federal income tax deduction for home mortgage interest and spending cuts related to the recent, so-called “fiscal cliff”.
As compared to the month prior, this month’s HMI showed the following :
- Current housing conditions were mostly unchanged between December and January
- Sales expectations the next six months dropped slightly between December and January
- Prospective home buyer foot traffic increased slightly between December and January
January marks the tenth consecutive month through which buyer foot traffic has increased. Foot traffic is now at its highest level in nearly 7 years.
The NAHB Housing Market Index suggests a slow, steady rise in confidence among the nation’s home builders. This is occurring, in part, because of improving housing market conditions both nationally and regionally. Another factor is rising confidence among today’s home buyers.
Home sale prices Cottonwood remain relatively low and mortgage rates sit below 4 percent. With demand for homes growing, prices are expected to rise. Home buyers this season may be more likely to get a good “deal” than the buyers of spring or summer.
The National Association of Home Builders (NAHB) released its Housing Market Index (HMI), showing another monthly gain — its ninth in a row.
The HMI — a gauge of homebuilder confidence — rose 1 point to 47 in December 2012, lifting the index to its highest levels since April 2006.
Readings under 50 indicate unfavorable housing conditions for builders. Readings over 50 signal “good” conditions. Coincidentally, the last time that the HMI read above 50 was April 2006, too.
The Housing Market Index is based on a survey which the NAHB sends to its members. The survey asks the nation’s builders to rate the current housing market conditions.
In December, home builders reported gains in two of the three areas surveyed:
- Current Single-Family Sales: 51 (+2 from November 2012)
- Projected Single-Family Sales: 51 (-1 from November 2012)
- Buyer Foot Traffic: 36 (+1 from November 2012)
It’s noteworthy that buyer foot traffic has climbed over nine straight months and is now at it’s highest reported level in nearly 7 years. Low mortgage rates and rising home prices throughout Cottonwood have compelled today’s renters and existing homeowners to consider their home buying options.
This was none more apparent that in the Northeast Region in which builder confidence grew twelve points to 42. The Midwest Region also showed a strong improvement, climbing 2 points to 53. The West and South regions fell slightly between November and December.
For today’s buyers, rising builder confidence may be a signal that home prices are headed higher. Confident home sellers — including the nation’s builders — are less likely to make price concessions into an improving market, or may be less likely to offer free upgrades to buyers.
Therefore, if you are in the market for a newly-built home, consider that you may get the best “deal” by acting sooner rather than later. Mortgage rates are rising and home prices are, too. Six months from now, your costs of homeownership may be higher.
The National Association of Home Builders (NAHB) released its Housing Market Index (HMI) Tuesday, which showed sharp, 5-point increase to 46 for November 2012, marking the seventh consecutive monthly gain for the HMI, and lifting the index to its highest point since May 2006.
Readings under 50 indicate unfavorable housing conditions for builders. Readings over 50 signal “good” conditions.
The Housing Market Index is a measure of builder confidence, published monthly, based on a survey sent to NAHB members which asks them to rate housing market conditions.
In November, home builders reported gains in two of the three areas surveyed:
- Current Single-Family Sales: 49 (+8 from October 2012)
- Projected Single-Family Sales: 53 (+2 from October 2012)
- Buyer Foot Traffic: 35 (unchanged from October 2012)
Builders report growing demand for new homes as inventories for alternative properties — distressed and foreclosed homes, for example — shrink nationwide.
Even Hurricane Sandy did little to suppress builder confidence.
The NAHB survey was conducted in the two weeks immediately following Hurricane Sandy so the Housing Market Index does reflect builder sentiment during that period. All regions of the country posted confidence gains in November.
The South Region showed a 4-point gain to 43; the West Region showed a 3-point gain to 47; the Midwest Region showed a 3-point gain to 45; and the Northeast Region showed a 2-point gain to 31.
Despite the gains, builders in Sedona and nationwide still report challenges with home appraisals and tight credit conditions. In addition, a shortage of buildable lots in some areas is limiting the ability for home builders to put more single-family homes on the market.
As builder confidence grows, today’s buyers throughout Arizona should prepare for the possibility of higher home prices. Confident sellers are less likely to make price concessions or to offer free upgrades.
If you are in the market for a new home, therefore, the time between now and the New Year may be the best opportunity to make a bid on a home. Starting next year, low prices may be gone.
As home prices rise, so does home builder confidence.
Tuesday, the National Association of Homebuilders reported its monthly Housing Market Index (HMI) at 41, a one-tick improvement from September and the highest HMI value since June 2006 — a span of 77 months.
The Housing Market Index is a homebuilder confidence indicator. When it reads 50 or better, the HMI suggests favorable conditions for home builders nationwide. Readings below 50 suggest unfavorable conditions for builders.
The HMI has not crossed 50 since April 2006 but the index has been making a run since last year, nearly tripling since the 14 reading of last year’s September.
In addition, builder confidence has climbed for six straight months.
For Cottonwood buyers of new construction, the Housing Market Index may help to set market expectations for the rest of 2012, and into early-2013. This is because the NAHB Housing Market Index is constructed as a composite survey, measuring builder sentiment in three specific areas — current home sales, future home sales, and buyer foot traffic.
What’s good for builders, though, may not be good for buyers.
When builders expect business to improve, they may be less willing to make concessions on price or product, holding home prices high and removing seasonal sales incentives.
This month, home builders are seeing strength in each of the three surveyed areas :
- Current Single-Family Sales : 42 (Unchanged from September)
- Projected Single-Family Sales : 51 (Unchanged from September)
- Buyer Foot Traffic : 35 (+5 from September)
All three values are at multi-year highs but it’s the level of foot traffic that may concern today’s home buyers. Builders report foot traffic through model units to be at the highest rate since mid-last decade. This, combined with a shrinking supply of homes for sale, has contributed to a rise in new home sale prices and suggests even higher home prices in 2013.
Like most of the U.S. housing market, new construction appears to have bottomed in October 2011. One year later, the market looks stronger.
The new construction housing market continues to make gains.
Wednesday, the U.S. Census Bureau reported Housing Starts for single-family homes up 5.5 percent in August to a seasonally-adjusted, annualized count of 535,000 units nationwide.
The report marks the fifth month of six that single-family starts increased, and marks the highest starts tally since April 2010 — the last month of that year’s federal homebuyer tax credit program.
A “housing start” is a new home on which construction has started and the steady growth in single-family starts suggests a stronger AZ housing market into 2013.
All four U.S. regions showed single-family housing start growth on both a monthly basis and on an annual one :
- Northeast Region : 4.5% monthly growth; 31.4% annual growth
- Midwest Region : 15.6% monthly growth; 74.5% annual growth
- South Region : 3.2% monthly growth; 17.2% annual growth
- Midwest Region : 4.6% monthly growth; 23.9% annual growth
The data is just the latest in a series of signals that today’s Cornville new construction housing market has put its worst days behind it.
The nation’s home builders appear to agree, as well.
Earlier this week, the National Association of Homebuilders released its Housing Market Index, a monthly metric which measures homebuilder confidence in the new construction market.
The homebuilder trade association put the HMI at 40 — a 6-year high. Builders expect a strong finish to 2012 and for momentum to carry into 2013 and beyond.
The new construction market — like most of housing — has been fueled by a combination of the lowest mortgage rates in history, ample access to low- and no-downpayment mortgages, and an ever-shrinking supply of new homes for sale.
In July there were just 142,000 new homes for sale nationwide, down 14% from the year prior. As supply shrinks, all things equal, new home prices rise.
If you’ve been considering new construction, therefore, talk to builders sooner rather than later. As demand for homes heats up, prices are likely to rise.
Home builder confidence continues to make new highs.
As reported by the National Association of Home Builders, the Housing Market Index, a measure of builder confidence, rose to a reading of 40 in September — its highest mark since June 2006.
The index is now higher through five straight months and 11 of the last 12.
For home buyers in Sedona , the survey may be signaling higher new home prices ahead; when builders are more confident in housing, they’re may be less likely to make concessions in price, and to “sweeten” deals with free upgrades and/or subsidized mortgage rates.
The Housing Market Index is published monthly, based on responses to a 3-question survey that the NAHB sends to its members. The questions cover three distinct parts of a builder’s business, each requiring a simple, one-word answer.
Builders are asked to respond with “Good”, “Fair” or “Poor”; or, “High”, “Average”, “Low” to the following three comments :
- Rate market conditions for the sale of new homes today
- Rate market conditions for the sale of new homes 6 months from today
- Rate the foot traffic of prospective new home buyers
All three survey components showed an increase from August with buyer foot traffic rating at its highest point in more than 6 years. This is especially noteworthy because as the number of prospective buyers increases, so does competition for homes for sale.
There are currently just 142,000 new homes for sale nationwide, the stock of which will “sell out” in 4.6 months at the current pace of sales.
Not since October 2011 has the national home supply been above six months, the consensus dividing line between bull and bear market. Today’s new construction market favors builders and builders know it.
If you’re planning to buy new construction in AZ later this year or into early-2013, consider moving up your time frame. Homes may be for sale, but they won’t likely be as inexpensive as they are today.
Home builder confidence rises again.
For August 2012, the National Association of Homebuilders reports the monthly Housing Market Index at 37 — an increase of more than 100% from one year ago and the highest HMI value since February 2007.
The Housing Market Index is an indicator of homebuilder confidence and when it reads 50 or better, the HMI suggests favorable conditions for home builders. Readings below 50 suggest unfavorable conditions for builders.
Despite the recent rise in home builder attitudes, however, the Housing Market Index remains mired below 50 where it’s been since April 2006.
For new construction home buyers in Cottonwood , the HMI may offer insight into the market for new homes through the end of this year. This is because the NAHB Housing Market Index is a composite survey, meant to gauge builder sentiment in three specific areas — current business, future business, and buyer activity.
When all three fronts are rising, it points to an improving market for sellers (i.e. home builders). Unfortunately, though, what’s good for sellers can be damaging to buyers. Builders are less willing to make concessions on price or product when markets are getting stronger.
In August, home builders saw strength across all three categories :
- Current Single-Family Sales : 39 (+3 from July)
- Projected Single-Family Sales : 44 (+1 from July)
- Buyer Foot Traffic : 31 (+3 from July)
Especially noteworthy in the August HMI is that builders project more sales for the next six calendar months than they have projected at any time in the last 5 years. With mortgage rates at all-time lows and buyer foot traffic growing, it’s no wonder confidence is high.
When demand for homes is strong amid stagnant or falling supplies, home prices rise and that’s exactly what we’re seeing in many U.S. markets. It’s a good time to be a AZ home buyer today, but market momentum appears to be shifting.
If you’re in the market for a newly-built home, therefore, the best “deal” may be the one you get today. Next year, your costs may be higher.
New construction housing is in a post-recession rally.
As reported by the Census Bureau, on a seasonally-adjusted, annualized basis, last month’s Single-Family Housing Starts rose 5 percent to 539,000 units nationwide. This is the highest reading since April 2010, the last month of that year’s federal home buyer tax credit.
A “housing start” is a new home on which construction has started.
June’s strong numbers also mark the fourth consecutive month during which Single-Family Housing Starts have climbed. This, too, has not occurred since April 2010.
The data is yet one more signal to Cornville home buyers that today’s new construction market has its worst days behind it.
Home builders think so, too.
Earlier this week, the National Association of Homebuilders released its monthly Housing Market Index, a metric which tracks homebuilder confidence. Home builders report higher sales levels and massive foot traffic as compared to just 12 months ago. They also expect second-half sales in 2012 to climb sharply.
It’s no wonder that home builder confidence rose to a 5-year high. Builders are building homes and buyers are buying them.
Today’s market for new homes has been spurred forward by low mortgage rates, but rising rents have played a part, too. In many parts of the country, a comparable home is less expensive to own than to rent, which creates an incentive for renters to buy homes instead.
The availability of low downpayment mortgage programs via the FHA and other government agencies helps as well.
It’s a good time to be home buyer. Mortgage rates are at all-time records, home prices remain low nationwide, and the real estate market is believed to be entering the beginning of a sustained, multi-year recovery.
If you’re undecided about whether now is a good time to buy a new home, speak with your real estate agent. The cost of home ownership may never be as low as it is today.
Homebuilder confidence is soaring.
For the second time in three months, the National Association of Homebuilders reports that the Housing Market Index made sizable gains.
The Housing Market Index measures homebuilder confidence in the new construction market and is scored between 1-100. Readings above 50 indicate favorable conditions in the single-family new home market. Readings below 50 indicate poor conditions.
The Housing Market Index leaped to 35 in July, a 6-point improvement and the index’s biggest one-month gain since September 2002.
The HMI is now up 14 points this year and is more than double its value of one year ago.
The Housing Market Index itself is a composite of three separate survey questions sent to NAHB members monthly. The questions are basic :
- How are market conditions for the sale of new homes today?
- How are market conditions for the sale of new homes in 6 months?
- How is prospective buyer foot traffic?
For July 2012, home builders reported huge gains. Current home sales are up 6 points; sales expectations for the next six months are up 11 points; and buyer foot traffic is up 6 points.
All three survey answers made 5-year highs. Not since 2007 has sales volume and foot traffic been as strong, and over the next 6 months, builders expect a blow-out finish to the year.
It’s no surprise, either.
Low mortgage rates throughout AZ have lowered monthly housing payments to levels below monthly rent for a comparable home. Plus, programs such as the FHA 3.5% downpayment program continue to help first-time buyers get in homes.
There is a downside to rising homebuilder confidence, however. When builders feel more comfortable about their business and the prospects for the future, they’re less likely to make sales concessions to to offer free upgrades. If you’re shopping for new construction, therefore, consider moving up your time frame.
Home affordability remains historically high today. It may not be so tomorrow.
New construction buyers in Sedona , look out. The nation’s home builders are predicting a strong 2012 for new home sales. It may mean higher home prices as the spring buying season approaches.
For the sixth straight month, the National Association of Homebuilders reports that homebuilder confidence is on the rise. The Housing Market Index climbed four points to 29 in February, the index’s highest reading since May 2007.
The Housing Market Index is now up 8 points in 8 weeks. The last time that happened was June 2003, a month during which the U.S. economy was regaining its footing, much like this month. It’s noteworthy that June 2003 marked the start of a 4-year bull run in the stock market that took equities up 54%.
The NAHB’s Housing Market Index itself is actually a composite reading. It’s the end-result of three separate surveys sent to home builders monthly.
The association’s questions are basic :
- How are market conditions for the sale of new homes today?
- How are market conditions for the sale of new homes in 6 months?
- How is prospective buyer foot traffic?
In February, builders reported marked improvement across all three areas. Builders report that current home sales climbed 5 points; that sales expectations for the next 6 months climbed 5 points; and that buyer foot traffic climbed 1 point.
Most notable of all of the statistics, though, is that the nation’s home builders report that there are now twice as many buyers setting foot inside model units as compared to just 6 months ago.
This data is supported by the monthly New Home Sales report which shows rising sales and a shrinking new home inventory.
Because of this, today’s new home buyers throughout Arizona should expect fewer concessions from builders at the time of contract including fewer price breaks on a home and fewer free upgrades. Builders are optimistic for the future and, therefore, may be less willing to “make a deal”.
This spring may mark the best time of year to buy a new home. 60 days forward, it may be too late.