Monday, 11 of December of 2017

Economics. Explained.  

Homebuilder Confidence

November 16, 2017

Homebuilder confidence rose 2 points in November to 70 after having jumped 4 points in October.  This level is just a shade below the highest reading for the business cycle which was 71 in March of this year.

NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas said, “November’s builder confidence reading is close to a post-recession high — a strong indicator that the housing market continues to grow steadily.  However, our members still face supply-side constraints, such as lot and labor shortages and ongoing building material price increases.”

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NAHB Chief Economist Robert Dietz said “Demand for housing is increasing at a consistent pace, driven by job and economic growth, rising homeownership rates and limited housing inventory.  With these economic fundamentals in place, we should see continued upward movement of the single-family housing market as we close out 2017.

Traffic through the model homes rose 2 points in November to 50 after having risen by 1 point in October.  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 1.35 million by the end of 2018.

Stephen Slifer

NumberNomics

Charleston, SC


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