The index measuring building confidence in the market for new single family homes stopped its three month slide in April, jumping four points from its March level. National Association of Home Builders (NAHB) Chairman Tom Woods said, "As the spring buying season gets underway, home builders are confident that current low interest rates and continued job growth will draw consumers to the market.
The NAHB/Wells Fargo Housing Market Index (HMI) rose to 56 in April. This is still 2 points below where it stood at the end of 2014.
The HMI is derived from a survey conducted by NAHB and Wells Fargo Bank among NAHB's new home builder-members. The survey, which has been conducted for over 30 years, asks respondents to define their perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three of the index components also gained ground in
April after declining steadily since the beginning of the year. The measure of sales expectations jumped five
points to 64 and the component gauging current sales conditions rose from 58 to
61. The component measuring buyer traffic,
consistently the lowest score in the series, increased four points to 41.
"The HMI component index measuring future sales expectations rose five points
in April to its highest level of the year," said NAHB Chief Economist David
Crowe. "This uptick shows builders are feeling optimistic that the housing
market will continue to strengthen throughout 2015."
Results were mixed for the regional three-month moving averages. The South was up one point to 56 and the Northwest was unchanged at 41. The Midwest and West both retreated by two and four points respectively from their March levels to scores of 54 and 58.
