Homebuilder confidence in housing market conditions dipped two points in January; ongoing challenges including labor shortages and materials costs were cited by the National Association of Home Builders, which provides monthly readings on home builder sentiment. Three component readings of the Housing Market Index declined by one point each. Readings for current sales conditions, housing market conditions for the next six months and for buyer traffic within new single-family housing developments were 79, 78 and 54 respectively.
Readings over 50 indicate positive builder sentiment. The reading for buyer traffic seldom exceeds 50. Current readings support continued builder confidence in current and future housing market conditions. NAHB Chief Economist Robert Dietz said housing demand should continue to grow in 2018 based on the gauge of future market conditions remaining in the 70s range. Real estate pros have repeatedly cited slim inventories of homes for sale as driving rapidly rising home prices.
NAHB estimated 1.125 million housing starts for 2018, which was 2.70 percent higher than for2017. The Commerce Department released its annual rate of housing starts in December at 1.192 million starts; Building permits were issued at the annual rate of 1.302 million permits issued in December, based on November’s annualized reading of 1.303 million permits issued.
Regional Builder Confidence Readings Rise
Regional readings for builder confidence were higher in all four regions tracked by NAHB. Calculated on a three-month rolling average, the Northeast gained five points for an index reading of 59; The Midwest posted a one-point gain for a January reading of 70. The South posted a one-point gain for an index reading of 73 and the West reported a two-point gain for a reading of 81.
Analysts said throughout 2017 that building more homes would be the only way to solve the housing shortage and resulting challenges including rapidly rising home prices that eliminate first-time and moderate-income home buyers out of affordable home prices and home financing options.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.