Builder sentiment increased five points in November to a record high of 90, according to cnbc.com. Any reading above 50 indicates a positive market; the National Association of Home Builders/Wells Fargo Housing Market Index had fallen to 30 in April.
Of the homebuilder index’s three components, current sales conditions rose six points to 96; sales expectations in the next six months increased one point to 89; and buyer traffic rose three points to 77.
The NAHB noted 69% of the responses for the November survey were received before the presidential election results were called by the media Nov. 7. The election results and their effects on builder sentiment will be reflected more fully in December’s report.
“Another record high for the HMI reflects that housing is a bright spot for the economy,” said NAHB Chief Economist Robert Dietz. “However, affordability remains an ongoing concern, as construction costs continue to rise and interest rates are expected to move higher as more positive news emerges on the coronavirus vaccine front.”
Homebuilders have been benefiting from a low supply of existing homes for sale and a newfound consumer desire to live in the suburbs. Builders were not prepared for the unexpected surge in demand and now are facing supply chain issues that are increasing costs.
