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.
According to Case-Shiller national and 20-city home price indices for October, home prices continued to rise. National home prices rose 0.70 percent for the three months ending in October. Year-over-year, national home prices increased by 6.20 percent. The 20-City Home Price Index also rose by 0.70 percent in October and reported a year-over-year increase of 6.40 percent.
Home builders surveyed by the National Association of Home Builders expressed their highest level of confidence in housing markets since 1999. The index reading for housing market conditions in December hit 74, which exceeded November’s reading of 70. Analysts expected a flat reading of 70 for December. Readings over 50 indicate improvement in housing market conditions.
Last week’s economic reports included NAHB Housing Market Indexes along with readings on housing starts, building permits and existing home sales. Weekly readings on mortgage rates and new jobless claims were also released.
Builder sentiment rebounded in October after lagging during summer months. The National Association of Home Builders Housing Market Index reading for October was four points higher than the expected reading of 64 and September’s reading, which was also 64. Any NAHB Housing Market Index reading over 50 is considered positive.
Last week’s economic reports included Case-Shiller’s Home Price Indices, readings on new and pending home sales and Freddie Mac ‘s weekly mortgage rates report. Weekly jobless claims and reports on inflation and core inflation were also released.
Case-Shiller reported higher sales of new homes for July; the national reading for new home sales increased by 0.10 percent to a seasonally-adjusted annual rate of 5.90 percent. The 20-City Home Price Index rose by 0.20 percent to 5.80 percent on a seasonally adjusted annual basis.
Home builders had less confidence in housing market conditions in September. In the aftermath of Hurricanes Harvey and Irma, builders worried that ongoing shortages of construction labor and materials would worsen. NAHB Chairman Granger MacDonald said that concerns over labor and building materials were “intensified,” but said that builder confidence was expected to return to high readings once rebuilding is underway.
The minutes of the March meeting of the Fedâs Federal Open Market Committee (FOMC) were released Tuesday and included a staff review of current economic conditions. The minutes noted that while labor markets continued to grow, inflation to the Fedâs target rate of 2.00 percent was impeded by dropping fuel prices. The Committee noted that expectations for longer-term inflation remained stable.
Home Builder Sentiment slipped to a reading of 57 in December according to the National Association of Home Builders Housing Market Index. November’s reading of 58 prompted analysts to project a reading of 59 for December. The latest reading marks the sixth consecutive month for readings above 50.