Homebuilders are feeling confident.
In fact, they are so confident, their confidence level just hit an 18-year high in December, raising 5 points to hit 74, according to the National Association of Home Builders. This is also the highest it has been since March, when it hit 71 on the National Association of Home Builders/Wells Fargo Housing Market Index. Any score above 50 is considered positive.
“Housing market conditions are improving partially because of new policies aimed at providing regulatory relief to the business community,” said NAHB Chairman Granger MacDonald, a homebuilder and developer from Kerrville, Texas.
NAHB’s Chief Economist Robert Dietz said that the measure of homebuyer traffic increased 8 percent, and “with low unemployment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year,” he added.
According to homebuilders, the current sales conditions have increased to favorable, as well as expectations of the next six months of home sales. In the Northeast, the index rose 1 point.
Relatedly, housing starts increased 3.3 percent in November across the country, showing that builders are indeed feeling optimistic. Single-family starts increased 5.3 percent, rising to an adjusted rate of 930,000. Year-to-year, single-family home starts saw an increase of 8.7 percent. However, multi-family starts fell slightly, 1.6 percent.
“The increase in single-family production is consistent with builder confidence gains, and shows builders are optimistic about new federal policies aimed to promote small business growth,” MacDonald added.