Saturday, 19 of August of 2017

Economics. Explained.  

Homebuilder Confidence

August 15, 2017

Homebuilder confidence jumped 4 points in August to 68 after having declined 2 points in July.  Confidence is bouncing around from month to month at a very high level.    Clearly, builders believe that the housing market will perform well in 2017.

“Our members are encouraged by rising demand in the new-home market,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.”

NAHB Chief Economist Robert Dietz said  “Builders continue to face supply-side challenges, such as lot and labor shortages and rising building material costs.”

Traffic through the model homes edged higher by 1 point in July to 49 after having declined by 1 points in July.  The March reading of 53 was the highest reading thus far in the business cycle.

Not surprisingly there is a close correlation between builder confidence and housing starts.  Right now starts are lagging considerably because builders are having some difficulty finding financing, building materials, an adequate supply of finished lots, and skilled labor.  Starts  currently are at a 1.2 million pace.  They should continue to climb gradually in the months ahead and reach 1.4 million by the end of 2017.

Stephen Slifer

NumberNomics

Charleston, SC


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