Report: Builder confidence in single-family home market up in August

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Builder confidence in the market for newly built, single-family homes in August rose one point to a level of 61 on the latest National Association of Home Builders/Wells Fargo Housing Market Index, which was released this week, the highest reading on the index since November 2005.

“Today’s report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015,” David Crowe, chief economist for the NAHB, said. “Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder 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, in which any number over 50 indicates that more builders view conditions as good than poor.

“The fact that builder confidence has been in the low 60s for three straight months shows that single-family housing is making slow-but-steady progress,” NAHB Chairman Tom Woods, a home builder from Blue Springs, Missouri, said. “However, we continue to hear that builders face difficulties accessing land and labor.”

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