Thursday, 22 of February of 2018

Economics. Explained.  

Homebuilder Confidence

February 15, 2018

Homebuilder confidence was unchanged in February at 72 after having declined 2 points in January.  The December level of 74 was the highest for this series since July 1999 — over 18 years ago.

NAHB Chairman Randy Noel, a homebuilder from LaPlace, Louisiana, said, “Builders are confident that changes to the tax code will promote the small business sector and boost broader economic growth.  Our members are excited about the year ahead, even as they continue to face building material price increases and shortages of labor and lots.”

Traffic through the model homes was unchanged in February at 54 after having fallen 4 points in January,  However, the December level of  58 which was by far the highest level thus far in the business cycle.  Traffic volume remains high and is a sign that buyer demand is on the rise.

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 1.25 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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