Buyer traffic accelerates, pushes up July homebuilder confidence
WASHINGTON (8/18/15)--Both buyer traffic and current sales conditions improved in July, according to the National Association of Home Builders’ monthly housing market index, which climbed overall to 61 from 60 during the month (Economy.com Aug. 17).
After a soft start to the year, homebuilder sentiment has rebounded strongly, rising in recent months to its highest level in the past 10 years.
“The index is safely above the average of 48 since the series’ creation in 1985, and is at its highest value in the past decade,” said John Weis, Moody’s analyst (Economy.com). “The present sales component of the index rose again, suggesting that single-family construction is picking up.”
Homebuilder sentiment for present sales rose to 66 from 65 during the month, while the future sales subcomponent remained at 70.
And while homebuyer traffic still appears to be lagging, it rose to 45 in July, climbing near its highest point of the year, according to Moody’s.
All regions over the last three months, meanwhile, have seen homebuilder confidence improve or remain the same, with the West and Midwest posting three-point improvements over that stretch, the South gaining two points and the Northeast standing pat.
The West and South were tied as the most optimistic regions nationwide.
“The threat of rising interest rates, which has been a consistent downside risk for most of this year, does temper the outlook,” Weis added. “The Fed is expected to raise rates in September, which may slow sales by raising the cost of borrowing for prospective buyers. Fortunately, a stronger labor market and national economy should offset much of the risk to the nation’s housing market.”